Discussion
The monetary management regulates:
Answer: D
Correct answer: All of the Above
Monetary management regulates all three dimensions together. Availability concerns how much credit banks can extend, governed by the reserve requirements and by open market operations. Cost concerns the rate of interest, governed by the policy rate.
Use concerns the direction of credit, governed by selective controls, priority sector requirements and margin stipulations. The three are not alternatives: a policy stance typically works on quantity and price simultaneously, with selective measures added where a particular sector needs restraining or encouraging.
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