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Ratios and OMO

Which among t...

Question

Which among the following would not help RBI to control the inflation in the country?

A

Increase in Reserve Ratio Requirements

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B

Increase in Bank Rate

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C

Purchase of securities in open market

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D

Increase in Repo Rate

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Solution

The correct option is B Purchase of securities in open market
Purchase of government securities and treasury bills by RBI or the central bank of the country.The objective is to regulate the money supply in the economy.
RBI carries out through commercial banks and does not directly deal with the public.

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