Macro

Money & Banking

Medium

Which of the following is a quantitative tool of credit control by the reserve bank of India?

Open market operations.

Margin requirements.

Moral suasion.

Direct Action.

✅ Correct Option: 1

Option 1 -> Open Market Operations is a quantitative/general tool that controls overall money supply.

Option 2 -> Margin requirements is a qualitative/selective tool targeting specific sectors.

Option 3 -> Moral suasion is a qualitative tool involving persuasion by RBI.

Option 4 -> Direct Action is a qualitative tool involving penalties on banks.

Hence, Option 1: Open market operations -> Open Market Operations (OMO) is a quantitative tool where RBI buys or sells government securities in the open market. When RBI buys securities, it injects money into the economy (expansionary). When it sells securities, it absorbs money from the economy (contractionary). This affects the overall credit availability and money supply in the entire economy, making it a general/quantitative tool, unlike qualitative tools (Options 2, 3, 4) which target specific sectors or situations -> correct

2025: 27 May Shift 2

Which are the following statements are true:

(A) Open Market Operations refers to buying and selling of bonds issued by the Government in the open market.

(B) Currency notes and coins are called fiat money.

(D) M1 and M2 are known as narrow money.

Choose the correct answer from the options given below:

2025: 31 May Shift 1

Arrange the following in chronological order.

(A) Barter System

(B) Currency notes

(D) Online transfer of money.

Choose the correct answer from the options given below:

(A), (B), (C), (D)
(A), (C), (B), (D)
(B), (A), (D), (C)
(C), (B), (D), (A)

2025: 29 May Shift 1

Which of the following are major functions of commercial banks?

2025: 2 June Shift 1

Repo Rate is the rate at which.

2026: 21 May Shift 2

Who is the custodian of the foreign exchange reserves of the economy?

2023: 1 June Shift 1

Money in the form of currency (Notes+Coins) held by the public, Net Demand deposits held by commercial Banks and the saving deposits with Post Office saving banks are known as :

Which of the following is a quantitative tool of credit control by the reserve bank of India?

Solution

Related questions:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)