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.

Answer 1

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

Decrease in Money Supply: (i); (iii)