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SSC CHSL 2023 PYQ — Question 29

SSC CHSL - 10 Aug 2023 - Shift 4 • General Awareness • Q29

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Which of the following is NOT a monetary policy instrument of RBI?

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Correct answer: A

Explanation

The correct answer is option 1 i.e. Government Spending.

Government Spending is NOT a monetary policy instrument of the RBI. It is a fiscal policy tool controlled by the government to influence economic activity through budget allocations.

Other Options:

  1. Bank Rate – The rate at which the RBI lends to commercial banks, influencing borrowing costs and money supply.

  2. Open Market Operations (OMOs) – Buying/selling government securities to adjust liquidity in the economy.

  3. Cash Reserve Ratio (CRR) – The percentage of deposits banks must keep with the RBI, controlling credit flow.

These are monetary policy tools used by the RBI to regulate inflation, liquidity, and economic growth, unlike government spending, which falls under fiscal policy.