Multiple choice

Which among the following is not true in relation to monetary policy?

  1. It regulates the supply of money and the cost and availability of credit in the economy.

  2. It deals with both the lending and borrowing rates of interest for commercial banks.

  3. It aims to maintain price stability, full employment and economic growth.

  4. The Finance Ministry is responsible for formulating and implementing Monetary Policy.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Monetary Policy is formulated and implemented by the Reserve Bank of India (RBI), not the Finance Ministry. The Finance Ministry handles Fiscal Policy. Options A, B, and C correctly describe what Monetary Policy does - it regulates money supply, credit costs, and aims for stability.

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