Macro

Money & Banking

Medium

Policy tools to control money supply by the RBI are given below. Identify the correct statements.

(A) Persuasion is a qualitative tool of RBI.

(B) RBI influences money supply through open market operation.

(C) Outright open market operations are temporary in nature.

(D) Selling of a bond by RBI leads to reduction in quantity of reserves.

Choose the correct answer from the options given below:

(A), (B) and (C) only

(A), (C) and (D) only

(A), (B), (C) and (D)

(A), (B) and (D) only

✅ Correct Option: 4

Persuasion or moral suasion is a qualitative tool (A). Open market operations, the buying and selling of government securities by RBI, influence money supply (B), and when RBI sells bonds, payments come out of bank reserves, reducing them (D). Outright open market operations are permanent, not temporary, so (C) is incorrect.

2025: 29 May Shift 2

Suppose, in a hypothetical economy, the cash reserve ratio is 20% and initial deposits are Rs.100. The value of money which a bank can use to give as a loan in the first round would be

2025: 21 May Shift 1

Rajesh is a weaver and is looking for food for his family. He approaches Shyam who is a farmer and offers to exchange clothes in return for wheat. However, Shyam says that his family needs shoes, not clothes. Which shortcoming of the barter system is being highlighted in this case?

2026: 23 May Shift 1

Identify the liabilities of the commercial banks from the following:

2023: 1 June Shift 1

Money in the form of currency (Notes+Coins) held by the public, Net Demand deposits held by commercial Banks and the saving deposits with Post Office saving banks are known as :

2025: 29 May Shift 2

Match List-I with List-II

List-I	List-II
(A) $M_1$	(I) $M_1$ + Net time deposits of commercial banks
(B) $M_3$	(II) Assets - Liabilities
(C) Net Worth	(III) 1/CRR
(D) Money Multiplier	(IV) Currency + Demand Deposit

Choose the correct answer from the options given below:

2022: 10 Aug Shift 2

Identify the quantitative tools used by RBI to control money supply.

(A) Moral Suasion

(B) Bank Rate

(D) Open Market Operations

(E) Margin requirement

Choose the correct answer from the options given below :

Solution

Related questions:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)