Neelam Kumari posted an Question
May 05, 2021 • 22:57 pm 30 points
  • UGC NET
  • Commerce

The central bank can significantly influence the savings, investments and consumer spending in the economy through which of the following policy

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  • Rucha rajesh shingvekar

    The central Bank can significantly influence the saving, investment and consumer spending in the economy through monetary Policy.  The RBI implements the monetary policy through open market operations, bank rate policy, reserve system, credit control policy, moral persuasion and through many other instruments. Using any of these instruments will lead to changes in the interest rate, or the money supply in the economy. Monetary policy can be expansionary and contractionary in nature. Increasing money supply and reducing interest rates indicate an expansionary policy. The reverse of this is a contractionary monetary policy.

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