Question : The monetary policy is controlled by the:
Option 1: Government
Option 2: Central bank
Option 3: Stock market
Option 4: Commercial banks
Correct Answer: Central bank
Solution : The correct answer is (b) Central bank.
Monetary policy is primarily controlled by the central bank of a country. The central bank is responsible for formulating and implementing monetary policy to achieve certain objectives such as price stability, economic growth, and low unemployment. It typically has the authority to regulate the money supply, set interest rates, and influence credit conditions in the economy. Central banks use various tools, such as open market operations, reserve requirements, and interest rate adjustments, to control the money supply and influence economic activity. While the government may have some influence on monetary policy through fiscal policy decisions, the central bank is generally the primary authority in charge of monetary policy.
Question : The discount rate is the interest rate at which:
Option 1: Commercial banks borrow from the central bank
Option 2: Commercial banks lend to the central bank
Option 3: The government borrows from the central bank
Option 4: The central bank lends to the government
Question : Which of the following is a function of the Reserve Bank of India (RBI)?
Option 1: Regulating the stock market
Option 2: Controlling inflation and monetary policy
Option 3: Issuing government bonds
Option 4: Regulating mutual funds
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile