Question

With reference to Indian economy, consider the following:
1) Bank rate
2) Open market operations
3) Public debt
4) Public revenue
Which of the above is/are component/components of Monetary policy?

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

Answer 1

The correct option is C 1 and 2

• Bank rate is the rate at which RBI lends long term to its clients. Open market operations refer to buying and selling of Govt securities by RBI in order to control the money supply in the market. Both are instruments of monetary policy.
  
• Public debt and public revenue are part of fiscal policy.