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WBCS Main Examination 2023 — Paper V: Indian Constitution and Economy · Question 113 of 200

Q113
Indian EconomyInflation
Which of the following the Reserve Bank uses as an anti-inflationary measure?
  1. a.Decrease in the Bank Rate
  2. b.Increase in the Bank Rate
  3. c.Reduction in the Cash Reserve Ratio
  4. d.Open market purchases of Government securities

Answer: (B) Increase in the Bank Rate

Raising the Bank Rate makes borrowing dearer and reduces credit and money supply, which curbs inflation. Cutting the Bank Rate or CRR and buying securities in the open market all inject money and would add to inflation.

Q112 Whole paperQ114