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