Which of the following indicators is/are used to observe the monetary transmission mechanism in the economy?<br>1. Weighted average lending rate<br>2. Weighted average domestic term deposit rate<br>3. 1-year median MCLR<br>4. SDF rate<br>Select the correct answer using the code given below.

  1. A. 1 and 2 only
  2. B. 1, 2 and 3
  3. C. 3 and 4
  4. D. 4 only

Correct Answer: B. 1, 2 and 3

Explanation

The RBI observes the monetary transmission mechanism through the weighted average lending rate, weighted average term deposit rate, and benchmark rates like the 1-year median MCLR (Marginal Cost of Funds based Lending Rate).

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