Q: 35 (CAPF/2024)
question_subject:
Economics
question_exam:
CAPF
Statement 1 is incorrect because increasing the bank rate does not increase money supply; it generally reduces it by making borrowing more expensive. Statement 2 is correct as purchasing securities injects money into the economy, increasing supply. Statement 3 is correct because increasing the cash reserve ratio reduces money supply by limiting the amount banks can lend.