INSIGHT UPSC QUIZ

GS Economy Monetary and Fiscal Policy
Q.

 Consider the following instruments of ‘Monetary Policy’: 

1. Cash Reserve Ratio. 

2. Statutory Liquidity Ratio. 

3. Marginal Requirement.

4. Open Market Operations.

Which of the instruments given above are the ‘quantitative instruments’ of Monetary Policy? 

Explanation:

ANSWER: (B)

Instruments of Monetary Policy 

These instruments can be categorized as:

  • Quantitative Measures: These are the traditional measures of monetary control. All the quantitative methods affect the entire credit market in the same direction. This means their impact on all the sectors of the economy is uniform.
  • Qualitative Measures: The credit objectives of these methods may include rationing the credit, directing the flow of credit from least important sectors to the most important sectors, controlling a speculating tendency based on the availability of bank credit. 
  • Bank Rate
  • Repo Rate 
  • Reverse Repo Rate 
  • Cash Reserve Ratio
  • Statutory Liquidity Ratio 
  • Open Market Operations
  • Marginal Requirement
  • Selective Credit Control
  • Moral Suasion

More Questions Selected Just For You. Attempt Now!