Question

Whether the following changes by the Reserve Bank will increase the money supply or decrease the money supply ?
(i) Rise In Repo rate.
(ii) Purchase of SecurItIes In the open market
(iii) RBI Increases the margin from 20% to 30%
(iv) RBI reduces the Cash reserve ratio.
A. Rise in Repo rate .
B. Purchase of Securities in the open market
C. RBI increase the margin from 20% to 30% .
D. RBI reduces the Cash reserver

Answer 1

Increase in Money Supply :(ii) , (iv), Decrease in Money Supply, (i), (ii)