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Home Questions XGA2X35CF9
Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

Arrange the following statements relating to open market operations in the correct sequence.

(A) There by resulting in an increase in money supply
(B) Central bank pays for it by giving a cheque
(C) Central bank buys a government bond in the open market
(D) This increases the total amount of reserves in the economy

Choose the correct answer from the options given below :

Options:

(A), (B), (C), (D)

(B), (A), (C), (D)

(D), (C), (B), (A)

(C), (B), (D), (A)

Correct Answer:

(C), (B), (D), (A)

Explanation:

The correct sequence for the statements relating to open market operations is: (C), (B), (D), (A)

Explanation:

  1. (C) Central bank buys a government bond in the open market.
  2. (B) Central bank pays for it by giving a cheque.
  3. (D) This increases the total amount of reserves in the economy.
  4. (A) Thereby resulting in an increase in money supply.

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