How many of the following measures are likely to lead to an increase in the money supply in India? 1. Expansion of credit operations by commercial banks 2. Borrowing by the Government of India from t…

Question

How many of the following measures are likely to lead to an increase in the money supply in India? 1. Expansion of credit operations by commercial banks 2. Borrowing by the Government of India from the RBI 3. Sale of government securities to the public by the RBI 4. Increase in the repo rate by the RBI 5. Increase in the Marginal Standing Facility (MSF) rate by the RBI Select the correct answer from the options given below:

PYQPulse · Accepted Answer

Only two

PYQPulse · Answer

Explanation: Only the first two increase money supply: bank credit expansion and government borrowing from the RBI; OMO sales and rate hikes reduce it.

Answer: A. Only two

Explanation

Answer: A. Only two

Explanation