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What does the Reserve Bank Of India regulate when it does some open market transactions?

10. What does the Reserve Bank Of India regulate when it does some open market transactions?

1. Borrowing Power from Commercial Banks
2. Inflation
3. Supply of Money
4. B & C

Answer: D) B & C

Explanation:

At the point when the Reserve Bank Of India needs to mix liquidity into the financial framework, it will purchase government protections in the open market. This way it furnishes business saves money with liquidity. Conversely, when it sells protections, it controls liquidity. Consequently, the Central Bank by implication controls the cash supply and impacts transient loan fees.