Question

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:
(a) 1 only
(b) 2 and 4 only
(c) 1 and 3
(d) 2; 3 and 4

Answer 1

Answer is C.) 1 and 3

Answer 2

THE CORRECT ANSWER IS OPTION B. 2 AND 4 ONLY.