Q: Which of the following action(s) by the Government would lead to contraction of money supply in the economy? 1. Purchase of Treasury Bills by the central bank from public 2. Sale of Treasury Bills by the central bank to public 3. Sale of foreign exchange by the central bank 4. Purchase of foreign exchange by the central bank Select the correct answer using the code given below:
(a)1 and 4 only
(b)1 and 3 only
(c)2 and 3 only
(d)2 only
Correct Answer: (c)
The correct answer is (c) '2 and 3 only'. Among the 4 statements given, this option correctly identifies which statements are accurate regarding External Sector & Trade (Indian Economy).