The monetary policy in India uses which of the following tools? 1. Bank rate 2. Open market operations 3. Public debt 4. Public revenue Select the correct answer using the code given below.

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Q: 30 (CDS-II/2017)
The monetary policy in India uses which of the following tools?
1. Bank rate
2. Open market operations
3. Public debt
4. Public revenue
Select the correct answer using the code given below.

question_subject: 

Economics

question_exam: 

CDS-II

stats: 

0,150,21,150,3,5,13

keywords: 

{'monetary policy': [0, 0, 0, 2], 'bank rate': [0, 1, 1, 2], 'public debt': [0, 0, 0, 6], 'public revenue': [0, 1, 1, 2], 'open market operations': [0, 0, 0, 1], 'india': [8, 1, 7, 13], 'tools': [0, 0, 0, 2]}

The correct answer is option 1, which states that the monetary policy in India uses bank rate and open market operations only. Let`s dissect each option to understand why.

Option 1 includes bank rate and open market operations. The bank rate is the rate at which the central bank lends money to commercial banks, which affects the interest rates in the economy. Open market operations involve buying and selling government securities to control the money supply in the economy.

Option 2 includes open market operations and public debt. Public debt refers to the borrowing of the government through the issuance of securities, but this is not directly related to the tools used in monetary policy.

Option 3 includes bank rate and public revenue. Public revenue refers to the government`s income through taxes and other sources, which is not a tool used in monetary policy.

Option 4 includes all the options mentioned, but public revenue is not a tool used in monetary policy.

Therefore, option 1 is the correct answer as it includes the tools used in the monetary policy of India.

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