UPSC Exam  >  UPSC Questions  >  Which of the following measures would result ... Start Learning for Free
Which of the following measures would result in an increase in the money supply in the economy?
1. Purchase of government securities from the public by the Central Bank
2. Deposit of currency in commercial banks by the public
3. Borrowing by the government from the Central Bank
4. Sale of government securities to the public by the Central Bank
Select the correct answer using the codes given below:
[2012]
  • a)
    1 only
  • b)
    2 and 4 only
  • c)
    1 and 3
  • d)
    2, 3 and 4
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Which of the following measures would result in an increase in the mon...
Explanation:

Purchase of government securities from the public by the Central Bank:
When the Central Bank purchases government securities from the public, it injects money into the economy, increasing the money supply.

Deposit of currency in commercial banks by the public:
When the public deposits currency in commercial banks, it increases the deposit base of the banks, allowing them to create more loans and increase the money supply through the money multiplier effect.

Borrowing by the government from the Central Bank:
When the government borrows from the Central Bank, it increases the reserves of the banking system, allowing them to create more loans and increase the money supply.

Sale of government securities to the public by the Central Bank:
When the Central Bank sells government securities to the public, it absorbs money from the economy, reducing the money supply.

Therefore, options 1 and 3 would result in an increase in the money supply in the economy.
Free Test
Community Answer
Which of the following measures would result in an increase in the mon...
1. Purchase of government securities from the public by the Central Bank
2. Borrowing by the government from the Central Bank
Explore Courses for UPSC exam

Top Courses for UPSC

Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer?
Question Description
Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer?.
Solutions for Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Which of the following measures would result in an increase in the money supply in the economy?1. Purchase of government securities from the public by the Central Bank2. Deposit of currency in commercial banks by the public3. Borrowing by the government from the Central Bank4. Sale of government securities to the public by the Central BankSelect the correct answer using the codes given below:[2012]a)1 onlyb)2 and 4 onlyc)1 and 3d)2, 3 and 4Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice UPSC tests.
Explore Courses for UPSC exam

Top Courses for UPSC

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev