If the central bank purchases the government securities from the commercial banks, it is likely to Option 1: Increase the money supply in the economy. Option 2: Reduce the money supply in the economy. Option 3: Decrease the demand of people. Option 4: Leaves the money supply in the economy unaffected.

The answer is 'Increase the money supply in the economy.'. View full solution:

CUET Economics - If the central bank purchases the government securities from the commercial banks, it is likely to | PYQs + Solutions

CUET Economics 2025 21 May Shift 1

Macro

Easy

Increase the money supply in the economy.

Reduce the money supply in the economy.

Decrease the demand of people.

Leaves the money supply in the economy unaffected.

✅ Correct Option: 1

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The Central Bank is a very important institution in the modern economy. What are the main characteristics of the Reserve Bank of India?

(A) India got its central bank in 1935.

(B) It is the custodian of the foreign exchange reserves of the economy.

(D) It also acts as a bank for the banking system.

Choose the correct answer from the options given below:

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22 May Shift 1

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CUET Economics 2025 21 May Shift 1 PYQs

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