Topic Details (Notes format)

Monetary Policy in India

Subject: Economics

Book: Comprehensive Indian Economy

Monetary policy revolves around regulating the money supply and interest rates to achieve price stability and sustainable growth. The Reserve Bank of India (RBI) uses tools like the repo rate, reverse repo rate, CRR, and open market operations to manage liquidity and inflation. Notably, an inflation-targeting framework was introduced to ensure accountability, with a Monetary Policy Committee deciding rate changes. From an exam viewpoint, remember how policy stances (accommodative, neutral, or hawkish) affect credit availability and consumer spending, and track how inflation targets guide RBI decisions in balancing growth with price stability.

Practice Questions

What is the main function of the Reserve Bank of India (RBI)?

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What does the term “national income” refer to?

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Which of the following is NOT an example of a direct tax?

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What is the meaning of “dumping” in international trade?

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Which of the following measures can reduce a trade deficit?

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What is meant by “liquidity trap”?

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What is meant by “monetary policy”?

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What is the purpose of the "Minimum Support Price" (MSP) in India?

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Which of the following is an example of a non-renewable resource?

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What does the “Phillips Curve” show?

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