Macro

Money & Banking

Medium

(A) Quantitative tools control the extent of money supply by changing the CRR.

(B) There are two types of open market operations – outright and upright.

(D) Selling of a bond by RBI leads to reduction in quantity of reserves.

(E) The RBI can influence money supply by changing the rate at which it gives loan to the commercial

banks.

Which of the following statements are true?

(A), (C) and (D) only

(A), (B) and (D) only

(B), (D) and (E) only

(A), (D) and (E) only

✅ Correct Option: 4

Option (A) means -> control money supply -> by changing CRR.
Option (B) states -> two types -> of open market operations.
Option (C) implies -> decrease money supply -> by changing bank rate.
Option (D) shows -> reduction in reserves -> by selling bonds.
Option (E) explains -> influence money supply -> by changing loan rates.

Correct options are: (A) -> Quantitative tools -> control money supply, (D) -> reduction in reserves -> by selling bonds, (E) -> influence money supply -> by changing loan rates.

2025: 14 May Shift 1

Which system requires double coincidence of wants?

2023: 20 June Shift 1

Given a Cash Reserve Ratio (CRR) being 20%, the value of the money multiplier will be_______.

2026: 12 May Shift 1

Arrange the following measures of money supply in decreasing order of their liquidity.

(A) M4

(B) M2

(D) M3

Choose the correct answer from the options given below:

2023: 20 June Shift 1

When Central Bank buys securities, this agreement of purchase also has specification about date and price of the resale, it is called:

2026: 11 May Shift 2

Arrange the following statements related to open market operations, a tool used by the Reserve Bank of India to control money supply in the economy, in the correct order of occurrence:

A. The total amount of reserves in the economy increases.

B. RBI buys government bonds.

C. As a result, money supply will increase.

D. RBI pays for the bonds by providing a cheque.

Choose the correct answer from the options given below:

2023: 20 June Shift 1

When Central Bank buys securities without any promise to sell them later, it is known as?

Which of the following statements are true?

Solution

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