Question

If a central bank conducts an Open Market Operation (OM

  • O involving the sale of government securities in the secondary market, the primary monetary impact is:
A An expansion of the central bank balance sheet size
B A drop in the overnight interbank call money lending rate
C An immediate contraction of the monetary base (M0) and bank reserves
D An increase in the money multiplier ratio
E An increase in commercial bank credit creation capacity
Practice Next

Hey! Ask a query

🎓
Think You're Ready for RBI Grade B?
RBI Grade B 2026 Phase 1 Memory Based Paper
  • 200 Questions with Detailed Solutions
  • Section-wise Coverage (GA, English, Quant & Reasoning)