Attempt this previous-year question. The correct option stays hidden until you choose.
Which of the following measures would result in an increase in the money supply in the economy?
1. Purchase of government securities from the public by the Central Bank
2. Deposit of currency in commercial banks by the public
3. Borrowing by the government from the Central Bank
4. Sale of government securities to the public by the Central Bank
Select the correct answer using the codes given below:
Pick an option to check yourself.
• Correct Answer: C
• RBI's purchase of government securities (OMO) and government borrowing from RBI inject money into the system.
• Currency deposits merely change money composition; selling securities absorbs liquidity.
Attempt Prelims MCQs or open Mains questions by paper — then continue the same bank inside the app with visual decks.
GyanGram