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    Question

    Which of the following measures would result in an

    increase in the money supply in the economy? a)         Purchase of government securities from the public by Central Bank b)         Deposit of currency in Commercial Banks by the public c)         Borrowing by the government from the Central Bank d)         Sale of government securities to the public by the Central Bank e)         Minting of more money by the Central Bank for circulation   Choose the correct answer from the options given below:
    A a, b and c only Correct Answer Incorrect Answer
    B a, c and e only Correct Answer Incorrect Answer
    C b, c and d only Correct Answer Incorrect Answer
    D b, d and e only Correct Answer Incorrect Answer
    E b and e only Correct Answer Incorrect Answer

    Solution

    a, c and e only Following would result in an increase in the money supply in the economy: ü  Purchase of government securities from the public by Central Bank ü  Borrowing by the government from the Central Bank ü  Minting of more money by the Central Bank for circulation  

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