[amp_mcq option1=”Bank Rate Policy” option2=”Rationing of Credit” option3=”Open Market Operation” option4=”None of the these” correct=”option1″]
The correct answer is: A. Bank Rate Policy
Bank rate policy is a tool of monetary policy used by central banks to control the money supply and interest rates. It is the interest rate that the central bank charges commercial banks for loans. When the central bank raises the bank rate, it makes it more expensive for commercial banks to borrow money, which in turn makes it more expensive for businesses and consumers to borrow money. This can help to slow down the economy and reduce inflation.
Rationing of credit is a tool of monetary policy used by central banks to control the amount of credit that is available to businesses and consumers. It is done by setting limits on the amount of credit that banks can lend. This can help to slow down the economy and reduce inflation.
Open market operations are a tool of monetary policy used by central banks to control the money supply. They are done by buying and selling government bonds in the open market. When the central bank buys government bonds, it injects money into the economy. When the central bank sells government bonds, it takes money out of the economy.
Therefore, the correct answer is: A. Bank Rate Policy