Match each policy tool to its job
Exercise and reference answers
- Matching pairs
- Left
- CRR
- Right
- Share of deposits held as cash reserves
- Left
- SLR
- Right
- Reserves a bank must hold in liquid form
- Left
- Bank rate
- Right
- Rate at which RBI lends to commercial banks
- Left
- Repo rate
- Right
- Rate on lending against a resale agreement
- Left
- Reverse repo
- Right
- Rate at which RBI withdraws money
- Left
- Open market ops
- Right
- Buying and selling government bonds
- Instructions
- Tap a tool on the left, then tap what it does.
Explanation
_Source: syllabus Macroeconomics XII Ch3 Money and Banking, 3.4 POLICY TOOLS TO CONTROL MONEY SUPPLY_