Identify which of the following measures taken by RBI will increase the money supply?

1. Increase in Cash Reserve Ratio
2. Decrease in Cash Reserve Ratio
3. Selling of a government bond
4. Buying of a government bond
5. Decrease in Bank Rate

B, D and E only

Decrease in CRR will increase the money available to the bank to lend to the citizens and create credit, resulting in an increased money supply in the economy. A decrease in the bank rate will result in a decreased rate of interest offered to the citizens, which will encourage people to take credit and will increase the money supply in the economy. Buying government bonds results in the injection of money into the market resulting in an increased money supply. Increase in CRR and selling of government bonds results in decreased money supply. Thus, the correct answer to the above question is option 4 i.e. B, D and E