To reduce money supply, the RBI would

sell government securities in the open marketCorrect answerYour answerbuy government securitiesCorrect answerYour answercut the repo rateCorrect answerYour answercut the CRRCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Buyers of the securities pay the RBI, which takes reserves out of banks.

Concept: OMO sale
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsOpen market operations

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Ten questions from The Central Bank & Monetary Policy, at your own pace.

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Ten questions from The Central Bank & Monetary Policy, at your own pace.

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To reduce money supply, the RBI would

Explanation