Solution

The following are examples of monetary policy's tools:
1. Qualitative-The following elements are included in the qualitative measures:
a. Marginal Requirements: Commercial banks grant loans based on the value of the collateral held as a mortgage. Banks always have a margin of difference between the loan value and the market value of the security that is mortgaged. When the central bank limits the flow of money, the marginal loan need rises, and in the case of credit policy, the opposite occurs.
b. Selective Credit Control (SCCs): This monetary policy tool is crucial for both positive and negative effects on a sector's credit flow. The favourable aspect deals with increasing credit flow to sectors that need it most, whereas the unfavourable element deals with limiting credit flow to a specific sector.
c. Moral persuasion is a sort of persuasion that central banks use to maintain pressure on commercial banks so that they follow the established monetary policies. It is done via holding meetings, seminars, and speeches.
2. Quality Assessments
a. Open Market Transactions: This phrase describes the central bank's buying and selling of securities exchanged between commercial banks and the general public on the open market.
b. Bank Rate Policy: This is the term used to describe how the central bank manipulates the discount rate in an effort to affect the credit situation of the economy.
c. Sterilization by RBI: Sterilizing is the term used to describe the RBI's market-based policy for reducing or eliminating the financial impact of foreign inflows.
d. The RBI use this tactic to urge commercial banks to help control the amount of money in the economy.