Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

Which of the following is a component of "Fiscal policy"?

Options:

Bank rate

Margin requirement 

Moral suasion 

None of the above

Correct Answer:

None of the above

Explanation:

Fiscal policy deals with the revenue and expenditure policy of the government. Bank rate, Moral suasion, margin requirements are the components of monetary policies. Monetary policy is the central bank’s action to establish economic stability in a nation.  There are two measures in which money supply is controlled by the RBI i.e. quantitative measures and qualitative measures.

Following are the quantitative measures:

  1. Bank rate
  2. Repo rate
  3. Reverse repo rate
  4. Open market operations
  5. Varying legal reserve requirements i.e. CRR, SLR

Following are the qualitative measures:

  1. Imposing margin requirements
  2. Moral suasion and direct action
  3. Selective credit control