Which of the following is not a monetary policy instrument of the RBI? MCQ with Answer and Explanation

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

A. CRR

B. Government expenditure

C. Open market operations

D. Repo rate

Answer: Option B

Solution (By JKSSB Mock Tests)

Government expenditure is a fiscal policy instrument, not a monetary policy instrument.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

Deflation is best defined as:

A. a fall in GDP

B. a decrease in the rate of inflation

C. a sustained fall in the general price level

D. a rise in unemployment

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Correct Answer: Option C

Explanation:
Deflation is a sustained fall in the general price level.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a characteristic of a developed money market?

A. Only long-term government securities

B. Presence of a wide range of instruments and high liquidity

C. High transaction costs and low participation

D. Absence of short-term instruments

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Correct Answer: Option B

Explanation:
A developed money market features a variety of short-term instruments, high liquidity, low transaction costs and active participation by financial institutions.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of cost curves, when Marginal Cost is less than Average Cost:

A. Average Cost is constant

B. Average Cost is falling

C. Average Cost is rising

D. Average Cost is at its maximum

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Correct Answer: Option B

Explanation:
When MC is below AC, it pulls the average down, so AC is falling. AC starts rising only when MC exceeds AC.

This question belongs to: Economy GK Economy Set 1

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