{"id":21419,"date":"2024-04-15T06:05:57","date_gmt":"2024-04-15T06:05:57","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=21419"},"modified":"2024-04-15T06:05:57","modified_gmt":"2024-04-15T06:05:57","slug":"if-the-rbi-adopted-an-expansionist-open-market-operations-policy-this-means-that-it-will-a-buy-securities-from-non-government-holders-b-sell-securities-in-the-open-market-c-offer-commercial-banks","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/if-the-rbi-adopted-an-expansionist-open-market-operations-policy-this-means-that-it-will-a-buy-securities-from-non-government-holders-b-sell-securities-in-the-open-market-c-offer-commercial-banks\/","title":{"rendered":"If the RBI adopted an expansionist open market operations policy, this means that it will A. buy securities from non-government holders B. sell securities in the open market C. offer commercial banks more credit in the open market D. openly announce to the market that it intends to expand credit"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;buy securities from non-government holders&#8221; option2=&#8221;sell securities in the open market&#8221; option3=&#8221;offer commercial banks more credit in the open market&#8221; option4=&#8221;openly announce to the market that it intends to expand credit&#8221; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is: A. buy securities from non-government holders.<\/p>\n<p>Open market operations are a monetary policy tool used by central banks to buy or sell government securities in the open market. When a central bank buys securities, it injects money into the economy. When a central bank sells securities, it withdraws money from the economy.<\/p>\n<p>An expansionist open market operations policy is a policy that aims to increase the money supply in the economy. This can be done by buying securities from non-government holders. When the central bank buys securities, it pays for them with newly created money. This increases the amount of money in circulation and can lead to lower interest rates and higher economic growth.<\/p>\n<p>The other options are incorrect because they do not describe an expansionist open market operations policy. Option B, sell securities in the open market, is a contractionary open market operations policy. Option C, offer commercial banks more credit in the open market, is a monetary policy tool that can be used to implement either an expansionist or contractionary open market operations policy. Option D, openly announce to the market that it intends to expand credit, is not a monetary policy tool.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;buy securities from non-government holders&#8221; option2=&#8221;sell securities in the open market&#8221; option3=&#8221;offer commercial banks more credit in the open market&#8221; option4=&#8221;openly announce to the market that it intends to expand credit&#8221; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[207],"tags":[],"class_list":["post-21419","post","type-post","status-publish","format-standard","hentry","category-indian-economy","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>If the 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