Which of the following measures result in an increase in money supply in the Indian economy 1 S...........

Indian Economy (Easy) Money and banking

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Which of the following measures result in an increase in money supply in the Indian economy?

1. Sale of government security by the Central Bank to public.

2. Increasing Statutory Liquidity Ratio by the Central Bank.

3. Sale of treasury bills by the government to the Central Bank.

Select the correct answer using the code given below.

3 only

1, 2 and 3

2 and 3 only

1 only

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Explanation:

A fall in interest rates increases the amount of money people wish to hold, while a rise in interest rates decreases that amount. A change in prices is another way to make the money supply equal the amount demanded. ... Conversely, when people hold less money than they want, they spend more slowly, causing prices to fall.