When the Central Bank intends to expand the credit, it should:

CA Foundation · Business Economics · MTP · June 2024
When the Central Bank intends to expand the credit, it should:
(A) A. Raise the margin requirements
(B) B. Raise the variable reserve ratio
(C) C. Lower the bank rate
(D) D. Purchase government securities in the open market

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. Purchase government securities in the open market

Topics: Money Market

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