[amp_mcq option1=”trading in securities” option2=”auctioning of Foreign Exchange” option3=”transaction in gold” option4=”none of the above Ans. a” correct=”option1″]<\/p>\n
The correct answer is (a) trading in securities.<\/p>\n
Open market operations are the buying and selling of government securities by a central bank. The central bank uses open market operations to control the money supply and interest rates.<\/p>\n
When the central bank buys securities, it injects money into the economy. This increases the money supply and lowers interest rates. When the central bank sells securities, it withdraws money from the economy. This decreases the money supply and raises interest rates.<\/p>\n
Open market operations are one of the most important tools that central banks use to manage the economy.<\/p>\n
(b) Auctioning of Foreign Exchange is not an open market operation. It is a tool that central banks use to manage the exchange rate.<\/p>\n
(c) Transaction in gold is not an open market operation. It is a tool that central banks use to manage their gold reserves.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”trading in securities” option2=”auctioning of Foreign Exchange” option3=”transaction in gold” option4=”none of the above Ans. a” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-499","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n