Monetary policy does NOT involve
QuestionMonetary policy does NOT involve
The correct answer is A.
Monetary policy is a tool used by the Central Bank to control the supply of money in the economy. It affects the interest rates, inflation, and economic growth. The question asks what monetary policy does not involve.
Option A, increasing import duties, is not a part of monetary policy. Import duties are a form of fiscal policy which is the government's use of taxation and spending to influence the economy.
Option B, buying or selling treasury bills, is a part of monetary policy. Treasury bills are a financial instrument used by the government to borrow money from the public. By buying or selling them, the Central Bank can control the amount of money in circulation.
Option C, printing more currency notes, is also a part of monetary policy. It is called quantitative easing and involves increasing the money supply to stimulate economic growth.
Option D, increasing or decreasing cash reserve ratio, is a part of monetary policy. Cash reserve ratio is the percentage of deposits that banks are required to hold as reserves. By increasing or decreasing it, the Central Bank can control the amount of money that banks can lend.
Option E, raising the level of interest, is also a part of monetary policy. By raising or lowering interest rates, the Central Bank can control the borrowing and lending behavior of banks and individuals, which affects the overall economy.
Therefore, the correct answer is option A, increasing import duties, as it is not a part of monetary policy.
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