Which are the following statements are true:

(A) Open Market Operations refers to buying and selling of bonds issued by the Government in the open market.

(B) Currency notes and coins are called fiat money.

(C) M2 and M4 are known as broad money.

(D) M1 and M2 are known as narrow money.

Choose the correct answer from the options given below:

Option 1 -> Statements A, B, and D are true. Open Market Operations involve buying/selling government bonds, currency notes/coins are fiat money, and M1 & M2 represent narrow money categories.

Option 2 -> Incorrect because statement D is actually true. M1 and M2 are classified as narrow money, not statement C which incorrectly includes M2 as broad money.

Option 3 -> Incorrect because statement C is false. M2 is not classified as broad money; typically M3 and M4 are considered broad money measures.

Option 4 -> Incorrect because statement A is true and must be included. Open Market Operations are a key monetary policy tool involving government securities.

Hence, Option 1: (A), (B) and (D) only -> Statement A is correct as OMO involves central bank transactions in government securities. Statement B is correct as fiat money refers to currency without intrinsic value, backed by government authority. Statement D is correct as M1 (currency + demand deposits) and M2 (M1 + savings deposits) represent narrow money categories with high liquidity. Statement C is incorrect because M2 is not broad money; M3 and M4 are classified as broad money measures -> correct