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Match List-I with List-II

List-IList-II
(A) Lender of last resort(I) 1/Cash reserve ratio
(B) Money multiplier(II) Buying and selling government securities
(C) Open market operations(III) RBI
(D) MtdM^d_t = kPY(IV) Transaction demand for money is positively related to the real income of an economy.

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 2

The RBI acts as lender of last resort to banks (A-III). The money multiplier equals 1/CRR1/CRR (B-I). Open market operations mean buying and selling government securities by the RBI (C-II). Mtd=kPYM^d_t = kPY shows transaction demand for money rising with real income (D-IV).

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