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      Question

      Which of the following instruments are the primary

      components of the Reserve Bank of India's Liquidity Adjustment Facility (LAF)?
      A Bank Rate and Marginal Standing Facility Correct Answer Incorrect Answer
      B Repo Rate and Reverse Repo Rate Correct Answer Incorrect Answer
      C Cash Reserve Ratio and Statutory Liquidity Ratio Correct Answer Incorrect Answer
      D Open Market Operations and Market Stabilization Scheme Correct Answer Incorrect Answer
      E Call Money and Notice Money Correct Answer Incorrect Answer

      Solution

      LAF is a monetary policy tool that allows banks to borrow money through repurchase agreements (repos) or make loans to the RBI through reverse repo agreements, aiding in short-term liquidity management.

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