Which of the following does not come under the quantitative methods of monetary policy? |
Cash Reserve Ratio Statutory liquidity ratio Repo Rate Moral Suasion |
Moral Suasion |
The correct answer is Option 3: Moral Suasion The tools used by the Central bank to control money supply can be quantitative or qualitative. Quantitative tools, control the extent of money supply by changing the SLR, CRR, or bank rate or open market operations. Qualitative tools include persuasion by the Central bank in order to make commercial banks discourage or encourage lending which is done through moral suasion, margin requirement, etc. |