The RBI can influence money supply by changing __________ at which it gives loan to the commercial Banks.
The RBI can influence money supply by changing __________ at which it gives loan to the commercial Banks.
Solution
✅ Correct Option: 4
The Bank Rate is the rate at which the RBI lends money to commercial banks as a lender of last resort. By changing the Bank Rate, RBI influences the cost of borrowing for commercial banks and hence the money supply in the economy.
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