Macro

Money & Banking

Medium

Match List-I with List-II

List-I List-II
(A) Buying and selling of bonds (I) Transaction Motive
(B) Hold money is to carry out expenses (II) Open Market Operations
(C) The number of times a unit of money changes hands during the unit period (III) Velocity of circulation
(D) Hold money in terms of bonds (IV) Speculative Motive

Choose the correct answer from the options given below:

List-I	List-II
(A) Buying and selling of bonds	(I) Transaction Motive
(B) Hold money is to carry out expenses	(II) Open Market Operations
(C) The number of times a unit of money changes hands during the unit period	(III) Velocity of circulation
(D) Hold money in terms of bonds	(IV) Speculative Motive

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

✅ Correct Option: 1

(A) Buying and selling of bonds -> Open Market Operations is a monetary policy tool where central banks buy/sell government securities to regulate money supply.

(B) Hold money to carry out expenses -> Transaction Motive refers to holding money for day-to-day transactions and regular expenses.

(C) The number of times a unit of money changes hands during the unit period -> Velocity of circulation measures how frequently money moves through the economy.

(D) Hold money in terms of bonds -> Speculative Motive refers to holding liquid assets or bonds based on expectations of future interest rate changes.

Hence, Option 1: (A) - (II), (B) - (I), (C) - (III), (D) - (IV) -> Open Market Operations involves bond transactions by central banks, Transaction Motive explains holding money for expenses, Velocity of circulation defines money turnover rate, and Speculative Motive relates to holding money/bonds for speculation on interest rates. This is the correct matching of economic concepts with their definitions. -> correct

2023: 28 May Shift 2

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

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

Choose the correct answer from the options given below :

2025: 26 May Shift 2

The RBI can influence money supply by changing the rate at which it gives long term loans to the commercial banks. This rate is called?

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:

2025: 2 June Shift 1

A cut in Repo Rate would lead to __________ in Money Supply and a cut in Reverse Repo Rate would lead to __________ in deposits of commercial bank to RBI

2026: 6 June Shift 1

In open market operation if Central Bank is buying government securities, how this will impact the money supply in the market?

2022: 30 Aug Shift 2

In a situation of Excess Demand.

Choose the correct option.

(A) Cash reserve ratio should decrease

(B) Bank rate should increase

(D) Statutory Liquidity Ratio should decrease

Choose the correct answer from the options given below :

Solution

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