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Which of the following cannot be called an anti-inflationary measure?

  1. A
    Increasing the Bank Rate
  2. B
    Increasing the Reserve Ratio requirements
  3. C
    Purchase of securities from the open market
  4. D
    Rationing of credit

Solution & Step-by-step Explanation

Purchasing securities from the open market by the central bank injects liquidity/money supply into the banking system, which is an expansionary measure that can worsen inflation. Anti-inflationary measures aim to reduce the money supply by selling securities, raising rates, or rationing credit.

Practice this question

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Which of the following cannot be called an anti-inflationary measure?
A
Increasing the Bank Rate
B
Increasing the Reserve Ratio requirements
C
Purchase of securities from the open market
D
Rationing of credit

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EconomicsMonetary PolicyInflation

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