Macro

Money & Banking

Medium

Arrange the following statements relating to open market operations in the correct sequence.

(A) There by resulting in an increase in money supply

(B) Central bank pays for it by giving a cheque

(C) Central bank buys a government bond in the open market

(D) This increases the total amount of reserves in the economy

Choose the correct answer from the options given below :

(A), (B), (C), (D)

(B), (A), (C), (D)

(D), (C), (B), (A)

(C), (B), (D), (A)

✅ Correct Option: 4

Open Market Purchase sequence: First, the central bank buys a government bond in the open market (C). It pays for this by issuing a cheque (B). This cheque increases the total reserves in the economy (D). Finally, higher reserves lead to increased money supply (A). Order: C, B, D, A.

2026: 13 May Shift 2

Exchange of commodities without the mediation of money is called as?

2022: 19 July Shift 2

Match List - I with List - II.

List - I (Banking)	List - II (Function)
(A) Commercial Bank	(I) Long term lending rate by RBI
(B) Reserve Bank of India	(II) Short term lending rate by RBI
(C) Bank Rate	(III) Credit creation
(D) Repo Rate	(IV) Lender of last resort

Choose the correct answer from the options given below :

2025: 13 May Shift 1

Among the following, which are the functions of money?

(A) Medium of exchange.

(B) Unit of account.

(D) Store of value

Choose the correct answer from the options given below:

2023: 30 May Shift 1

If Cash Reserve Ratio is 20%, what will be the value of money multiplier ?

2025: 29 May Shift 1

What is the process through which banks create money?

2025: 22 May Shift 2

Arrange the following statements related to money multiplier process in correct sequence.

(A) The bank has Rs 140 as deposits.

(B) The bank has Rs 80 to lend.

(D) The bank lends 50% of lending amount to Sonia.

Choose the correct answer from the options given below:

Solution

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