Question

Q. Which of the following is a Quantitative tool used by RBI to control the money supply?

Answer using the codes given below

• A.
  1, 2 and 3 only
• B.
  1, 2 and 4 only
• C.
  2, 3 and 4 only
• D.
  1, 2, 3 and 4

Answer 1

The correct option is B

1, 2 and 4 only

Explanation:

The RBI controls the money supply in the economy through quantitative and qualitative tools. Under Quantitative measures money supply is controlled through tools like CRR, or bank rate or open market operations.

Under qualitative measures, tools such as moral suasion, margin requirement, etc. are used.