What happens to money supply if the RBI increases the cash reserve ratio? Option 1: Money supply increases. Option 2: Money supply decreases. Option 3: Money supply remains constant. Option 4: No change in money supply.

The answer is 'Money supply decreases.'. View full solution:

CUET Economics - What happens to money supply if the RBI increases the cash reserve ratio? | PYQs + Solutions

CUET Economics 2025 29 May Shift 1

Macro

Easy

Money supply increases.

Money supply decreases.

Money supply remains constant.

No change in money supply.

✅ Correct Option: 2

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CUET Economics 2025 29 May Shift 1 PYQs

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