{"id":85479,"date":"2025-06-01T03:18:31","date_gmt":"2025-06-01T03:18:31","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=85479"},"modified":"2025-06-01T03:18:31","modified_gmt":"2025-06-01T03:18:31","slug":"which-of-the-following-indicators-is-are-used-to-observe-the-monetary","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/","title":{"rendered":"Which of the following indicators is\/are used to observe the monetary"},"content":{"rendered":"<p>Which of the following indicators is\/are used to observe the monetary transmission mechanism in the economy?<\/p>\n<ul>\n<li>1. Weighted average lending rate<\/li>\n<li>2. Weighted average domestic term deposit rate<\/li>\n<li>3. 1-year median MCLR<\/li>\n<li>4. SDF rate<\/li>\n<\/ul>\n<p>Select the correct answer using the code given below.<\/p>\n<p>[amp_mcq option1=&#8221;1 and 2 only&#8221; option2=&#8221;1, 2 and 3&#8243; option3=&#8221;3 and 4&#8243; option4=&#8221;4 only&#8221; correct=&#8221;option2&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC CDS-1 &#8211; 2024<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-cds-1-2024.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-cds-1-2024\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nThe monetary transmission mechanism (MTM) describes how changes in the central bank&#8217;s policy rate are transmitted through the economy to influence inflation and output. Observing this mechanism involves tracking how various interest rates and credit conditions respond to policy changes. Weighted average lending rate (WALR), weighted average domestic term deposit rate (WADTDR), and 1-year median MCLR (Marginal Cost of Funds based Lending Rate) are key indicators of how policy rate changes affect the rates charged by banks to borrowers and offered to depositors. These are crucial steps in the transmission process to the real economy.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\nWALR, WADTDR, and MCLR are standard indicators used to assess the pass-through of monetary policy changes to bank interest rates in India.<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nThe SDF rate is a policy rate set by the RBI and is part of the monetary policy framework. While changes in the SDF rate *drive* the initial stages of transmission (especially in the money market), the rates like WALR, WADTDR, and MCLR are used to *observe* how the policy signal has been transmitted to the banking system&#8217;s retail rates. All four rates (including money market rates influenced by SDF) are tracked to understand MTM, but 1, 2, and 3 are direct indicators of transmission to the banking system&#8217;s interface with the public.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Which of the following indicators is\/are used to observe the monetary transmission mechanism in the economy? 1. Weighted average lending rate 2. Weighted average domestic term deposit rate 3. 1-year median MCLR 4. SDF rate Select the correct answer using the code given below. [amp_mcq option1=&#8221;1 and 2 only&#8221; option2=&#8221;1, 2 and 3&#8243; option3=&#8221;3 and &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Which of the following indicators is\/are used to observe the monetary\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/#more-85479\">Detailed Solution<span class=\"screen-reader-text\">Which of the following indicators is\/are used to observe the monetary<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1087],"tags":[1103,1120,1190],"class_list":["post-85479","post","type-post","status-publish","format-standard","hentry","category-upsc-cds-1","tag-1103","tag-economic-development","tag-money-banking","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Which of the following indicators is\/are used to observe the monetary<\/title>\n<meta name=\"description\" content=\"The monetary transmission mechanism (MTM) describes how changes in the central bank&#039;s policy rate are transmitted through the economy to influence inflation and output. Observing this mechanism involves tracking how various interest rates and credit conditions respond to policy changes. Weighted average lending rate (WALR), weighted average domestic term deposit rate (WADTDR), and 1-year median MCLR (Marginal Cost of Funds based Lending Rate) are key indicators of how policy rate changes affect the rates charged by banks to borrowers and offered to depositors. These are crucial steps in the transmission process to the real economy. WALR, WADTDR, and MCLR are standard indicators used to assess the pass-through of monetary policy changes to bank interest rates in India.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Which of the following indicators is\/are used to observe the monetary\" \/>\n<meta property=\"og:description\" content=\"The monetary transmission mechanism (MTM) describes how changes in the central bank&#039;s policy rate are transmitted through the economy to influence inflation and output. Observing this mechanism involves tracking how various interest rates and credit conditions respond to policy changes. Weighted average lending rate (WALR), weighted average domestic term deposit rate (WADTDR), and 1-year median MCLR (Marginal Cost of Funds based Lending Rate) are key indicators of how policy rate changes affect the rates charged by banks to borrowers and offered to depositors. These are crucial steps in the transmission process to the real economy. WALR, WADTDR, and MCLR are standard indicators used to assess the pass-through of monetary policy changes to bank interest rates in India.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T03:18:31+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Which of the following indicators is\/are used to observe the monetary","description":"The monetary transmission mechanism (MTM) describes how changes in the central bank's policy rate are transmitted through the economy to influence inflation and output. Observing this mechanism involves tracking how various interest rates and credit conditions respond to policy changes. Weighted average lending rate (WALR), weighted average domestic term deposit rate (WADTDR), and 1-year median MCLR (Marginal Cost of Funds based Lending Rate) are key indicators of how policy rate changes affect the rates charged by banks to borrowers and offered to depositors. These are crucial steps in the transmission process to the real economy. WALR, WADTDR, and MCLR are standard indicators used to assess the pass-through of monetary policy changes to bank interest rates in India.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/","og_locale":"en_US","og_type":"article","og_title":"Which of the following indicators is\/are used to observe the monetary","og_description":"The monetary transmission mechanism (MTM) describes how changes in the central bank's policy rate are transmitted through the economy to influence inflation and output. Observing this mechanism involves tracking how various interest rates and credit conditions respond to policy changes. Weighted average lending rate (WALR), weighted average domestic term deposit rate (WADTDR), and 1-year median MCLR (Marginal Cost of Funds based Lending Rate) are key indicators of how policy rate changes affect the rates charged by banks to borrowers and offered to depositors. These are crucial steps in the transmission process to the real economy. WALR, WADTDR, and MCLR are standard indicators used to assess the pass-through of monetary policy changes to bank interest rates in India.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T03:18:31+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/","url":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/","name":"Which of the following indicators is\/are used to observe the monetary","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T03:18:31+00:00","dateModified":"2025-06-01T03:18:31+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"The monetary transmission mechanism (MTM) describes how changes in the central bank's policy rate are transmitted through the economy to influence inflation and output. Observing this mechanism involves tracking how various interest rates and credit conditions respond to policy changes. Weighted average lending rate (WALR), weighted average domestic term deposit rate (WADTDR), and 1-year median MCLR (Marginal Cost of Funds based Lending Rate) are key indicators of how policy rate changes affect the rates charged by banks to borrowers and offered to depositors. These are crucial steps in the transmission process to the real economy. WALR, WADTDR, and MCLR are standard indicators used to assess the pass-through of monetary policy changes to bank interest rates in India.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-indicators-is-are-used-to-observe-the-monetary\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC CDS-1","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-cds-1\/"},{"@type":"ListItem","position":3,"name":"Which of the following indicators is\/are used to observe the monetary"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/85479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=85479"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/85479\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=85479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=85479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=85479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}