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    Question

    What primary function do Treasury Bills (T-Bills) serve in

    government finance?
    A To provide long-term investment options Correct Answer Incorrect Answer
    B To raise short-term funds for the government Correct Answer Incorrect Answer
    C To offer high returns to investors Correct Answer Incorrect Answer
    D To control inflation rates Correct Answer Incorrect Answer

    Solution

    Treasury Bills (T-Bills) are primarily issued by governments to secure short-term funding for immediate fiscal requirements, such as covering operational expenses or financing short-duration development initiatives. Additionally, the Reserve Bank of India (RBI) utilizes these financial instruments in open market operations as mechanisms to manage liquidity within the banking system and as a tool for inflation control.

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