CUET Preparation Today
| There are two entities making their own policies that affect the entire economy. One is the government that makes fiscal policy and the other is the central bank creating the monetary policy. Monetary policy directly affects the money supply in the economy. This is done via various instruments like repo rate, reverse repo rate, open market operations, and bank rate. These are the quantitative methods of money supply control. There are certain qualitative ones too. These are moral suasion, margin requirements, and credit rationing. The central bank of India is RBI. It issues currency notes in India. In fiscal policy, the government decides the taxation rate, how much to spend, and other things that affect aggregate demand. |
| Every currency note and coin bears on its face a promise from which of the following? |
Prime Minster of India Governor of RBI Deputy Governor of RBI Finance Secretary of India |
| Governor of RBI |
| Every currency note bears on its face a promise from the Governor of RBI that if someone produces the note to RBI, or any other commercial bank, RBI will be responsible for giving the person purchasing power equal to the value printed on the note. The same is also true of coins. |
