alleryTo increase the money supply, the RBI is most likely to:
Araise the bank rate
Braise the Cash Reserve Ratio
Clower the Cash Reserve Ratio
Daggressively sell government bonds
Answer & Solution
Correct answer: C. lower the Cash Reserve Ratio
Lowering the CRR frees more deposits for lending, raising the multiplier and expanding money supply
the other options are contractionary.
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