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Q. Which of the following are Quantitative tools used by RBI to control the money supply?
  1. CRR
  2. Bank Rate
  3. Margin requirement
  4. Open market operations
Select the correct answer using the codes given below:

  1. 1, 2 and 3 only

  2. 1, 2 and 4 only

  3. 1, 2, 3 and 4

  4. 2, 3 and 4 only


Solution

The correct option is B
1, 2 and 4 only
Explanation:

The RBI controls the money supply in the economy through quantitative and qualitative tools. Under Quantitative measures money supply is controlled through tools like CRR, or bank rate or open market operations.

Under qualitative measures, tools such as moral suasion, margin requirement, etc. are used.

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