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SSC MTS 2023 PYQ — Question 71

SSC MTS - 04 May 2023 - Shift 1 • General Awareness • Q71

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Which RBI tool refers to buying and selling of bonds issued by the Government in the open market?

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Correct answer: D

Explanation

The correct answer is option 4 i.e. Open Market Operations.

  • Open market operations involve the buying and selling of government bonds by a central bank in the open market. These actions are used to regulate the money supply and influence interest rates in the economy.
  • By purchasing bonds, the central bank injects liquidity, whereas selling bonds absorbs excess funds from the financial system.