A) Increase bank rate
B) Sell government securities
C) Increase reserve ratios
D) All of above
Correct Answer: D
Solution :
[d] To combat from inflation, RBI has to sell government securities, increase bank rate, increase policy rate, etc. so that banks have left less money to lend then people borrow less, demand goes down and the result of it is the prices of goods and services also goes down. This is how, RBI decreases the inflation rate.
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