The transmission mechanism of monetary policy is correlated to lending which expands aggregate demand in the economy. The banking system form an important place in the monetary policy transmission. The channels of monetary policy transmission are: Interest Rate Channel, Credit or Loan Supply Channel, Exchange Rate Channel, and Asset Price Channel. The financial prices include interest rates, exchange rates, yields, asset prices, and equity prices, and the financial quantities consists of money supply, credit aggregates, supply of government bonds and foreign denominated assets. RBI uses various monetary policy frameworks over the years which is classified as pre-monetary targeting (1947 to 1984-85), monetary targeting (1984-85 to 1997- 98), Multiple Indicators approach (1998-99 to 2014), Inflation Targeting (from 2013 onwards), and Flexible Inflation Targeting (FIT). MCLR also drastically decreased for all these banks from 2019 to 2021. The external benchmark has increased for the three types of banks from 2019 to 2021. The repo rate gives a contrast data between pre and post FIT periods. The financial system is not fully developed which is a hindrance to the transmission mechanism. The cost of lending, issues in bond market, and pandemic situation related problems requires an appropriate transmission mechanism in the monetary policy of our country.

Calculus is one of the important components of mathematical tools used in economics. This enables understanding, improving and problem-solving tools for economic variables. The mathematical analysis contains differential calculus and integral calculus. Calculus is mostly expressed in functions and derivatives. The two-consumer demand theories are cardinal and ordinal. The former is the marginal utility approach and the latter is indifference curve analysis popularised by authors like Gossen (1854), William Jevons (1871), Leon Walras (1874), Carl Marshall (1890), Menger (1950), Hicks (1956), Pareto (1909), P.A. Samuelson (1949), and Robbins (1984) etc. These models analysed the relationship between the price of a commodity and the quantity demanded of the same commodity for deriving individual and market demand curves. The coefficient of price, income and cross elasticities and price, income and substitution effects are also part of these theories.