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    Question

    When the central bank (RBI) sells stocks and bonds in

    the market, the amount of money in the bank _______.
    A Fall Correct Answer Incorrect Answer
    B Rise Correct Answer Incorrect Answer
    C No effect Correct Answer Incorrect Answer
    D Equal Effect Correct Answer Incorrect Answer
    E May rise or may fall Correct Answer Incorrect Answer

    Solution

    when the central bank sells stocks and bonds in the market. Because these investments are safe, most people buy them. When they pay, they write out a check from their account at the commercial bank to pay for things. The amount of money in the bank falls.

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