Question
UPSC Prelims 2015 Question:
With reference to the Indian economy, consider the following:
- Bank rate
- Open market operations
- Public debt
- Public Revenue
Which of the above is/are component/components of Monetary Policy?
Answer (Detailed Solution Below)
Option 3: 1 and 2
Detailed Solution
Explanation:
- Monetary policy is the prerogative of the Central Bank. In this case, it is the Reserve Bank of India.
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- The monetary policy comprises open market operations, bank rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), repo operation etc. So, points 1 and 2 are correct.
- Management of public debt in India is done by the executive or the Central Government. So, point 3 is not correct.
- Public Revenue comes under the Annual Financial Statement or the Budget which is a tool of fiscal policy. So, point 4 is not correct.
Therefore, option (3) is the correct answer.
Subject: Economics | Money and Banking
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