Answer-In the context of Indian economy, ‘Open Market Operations’ refers to:

Q: Answer-In the context of Indian economy, &lsquo;Open Market Operations&rsquo; refers to:

It is an activity by a central bank RBI to buy or sell government securities. The aim of open market operations is to manipulate the short term interest rate and the supply of base money in an economy, and indirectly control the total money supply.

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Question

In the context of Indian economy, ‘Open Market Operations’ refers to:

A borrowing by scheduled banks from the RBI Correct Incorrect

B lending by commercial banks to industry and trade Correct Incorrect

C purchase and sale of government securities by the RBI Correct Incorrect

D lending by central bank to commercial banks Correct Incorrect

E None of the above Correct Incorrect

Detailed Solution

It is an activity by a central bank (RBI) to buy or sell government securities. The aim of open market operations is to manipulate the short term interest rate and the supply of base money in an economy, and indirectly control the total money supply.

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In the context of Indian economy, ‘Open Market Operations’ refers to:

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