Question : Which of the following is not a monetary policy instrument of RBI?
Option 1: Government Spending
Option 2: Bank Rate
Option 3: Open Market Operations
Option 4: Cash Reserve Ratio
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Correct Answer: Government Spending
Solution : The correct answer is Government spending .
Government Spending is not a monetary policy instrument of the Reserve Bank of India (RBI). The other options - Bank Rate, Open Market Operations and Cash Reserve Ratio - are indeed monetary policy instruments used by the RBI to regulate the money supply, and influence economic conditions. Government spending, on the other hand, falls under fiscal policy and is primarily determined by the government rather than the central bank.
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