Macro

Money & Banking

Easy

Arrange the following statements in the context of impact on money supply by using Open Market Operations (OMO) tool.

A. RBI buys a Government bond in the open market.

B. It leads to increase in money supply.

C. RBI Pays through cheque to the commercial banks.

D. Thus increases the credit creation capacity of commercial banks.

Choose the correct answer from the options given below:

A, B, C, D

A, C, D, B

B, A, D, C

C, B, D, A

✅ Correct Option: 2

In an expansionary OMO, the RBI first buys government bonds in the open market (A), then pays the commercial banks through cheques (C). This raises bank reserves and increases their credit creation capacity (D), which finally leads to an increase in money supply (B). Order: A, C, D, B.

2025: 22 May Shift 1

Match List-I with List-II

List-I	List-II
(A). M1	(I). Currency held by the public and net demand deposits held by commercial banks
(B). M2	(II). M3 + Total deposits with Post Office savings organisations
(C). M3	(III). M1 + Net time deposits of commercial banks
(D). M4	(IV). M1 + Savings deposits with Post Office savings banks

Choose the correct answer from the options given below:

2026: 31 May Shift 1

Arrange the following measures of money supply (monetary aggregates) in increasing order of liquidity.

A. CU + DD where CU is currency held by the public and DD is net demand deposits of banks

B. CU + DD + Savings deposits with Post Office savings banks

C. CU + DD + Net time deposits of commercial banks

D. CU + DD + Net time deposits of commercial banks + Total deposits with Post Office savings organisations (excluding National Savings Certificates)

Choose the correct answer from the options given below:

2023: 29 May Shift 2

As a bankers' bank, what is the role played by RBI?

A. Custodian of cash reserves

B. Maintain Foreign Exchange Reserves

C. Currency Issue

D. Lender of last resort

E. Clearing house

Choose the correct answer from the options given below:

2025: 15 May Shift 1

Which is the most commonly used measure of money supply?

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 :

2025: 26 May Shift 2

Which of the following is/are a qualitative tool of credit control adopted by the central bank of a country?

(A) Repurchase agreement.

(B) Moral suasion.

(D) Margin requirements.

Choose the correct answer from the options given below:

Solution

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