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      Question

      The process by which a central bank influences the money

      supply and interest rates by buying and selling government securities is known as:
      A Cash Reserve Ratio (CRR) Correct Answer Incorrect Answer
      B Statutory Liquidity Ratio (SLR) Correct Answer Incorrect Answer
      C Open Market Operations (OMO) Correct Answer Incorrect Answer
      D Repo Rate operations Correct Answer Incorrect Answer

      Solution

      Open Market Operations (OMO) refer to the buying and selling of government securities in the open market by the central bank (RBI in India) to expand or contract the amount of money in the banking system.

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