Which of the following is not an instrument of Monetary Policy?

Correct option is D

Correct Answer : (D) Tax rate
Explanation:
Monetary policy refers to the management of money supply and interest rates by central banks to control inflation, stabilize the currency, and achieve sustainable economic growth. The primary instruments used for monetary policy include:
Information Booster:
1. Option D: Tax rate-  It is an instrument of Fiscal policy, managed by the government, affects tax rates, government spending, and borrowing. Adjustments in tax rates directly influence government revenue and economic activities but do not control money supply or interest rates, which are the focus of monetary policy.
Additional Information:
1. Option A: Cash Reserve Ratio (CRR): A key tool in monetary policy used to control the liquidity in the banking system. When the CRR is raised, banks have to keep more money in reserves and thus have less to lend, reducing the money supply in the economy.
2. Option B: Open Market Operations (OMO): This is one of the most flexible tools of monetary policy. Buying government securities increases the money supply, while selling them decreases it, influencing short-term interest rates and overall economic activity.
3. Option C: Bank Rate: It is used by the central bank to adjust inflation and economic growth. A higher bank rate tends to cool down the economy, while a lower rate can stimulate economic activity.