UPSC Prelims 2015 Question:

With reference to the 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?

Explanation: 

• Monetary policy is the prerogative of the Central Bank. In this case, it is the Reserve Bank of India.
  

• • 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