Consider the statements about Open Market Operations (OMO):

(A) OMO is a tool by which the Reserve Bank of India(RBI) controls money supply.

(B) OMO is an example of Qualitative Control.

(C) Selling bonds through RBI reduces the money supply.

(D) Outright OMOs are permanent in nature.

Choose the correct answer from the options given below:

1. (A), (B), (C), (D)
2. Only (A), (B), (C)
3. Only (A), (C), (D)
4. Only (A), (D)

Statement (A) -> OMO is indeed a monetary policy tool used by RBI to regulate money supply - TRUE.

Statement (B) -> OMO is a QUANTITATIVE control tool, not qualitative. Quantitative tools control volume of credit while qualitative tools control direction of credit - FALSE.

Statement (C) -> When RBI sells bonds, buyers pay money which gets withdrawn from circulation, reducing money supply - TRUE.

Statement (D) -> Outright OMOs involve outright purchase/sale of securities and are permanent, unlike repo operations which are temporary - TRUE.

Hence, Option 3: Only (A), (C), (D) -> Statement (B) is incorrect because OMO is a quantitative monetary policy tool that affects the overall volume of money supply and credit in the economy. Qualitative tools (like selective credit control, margin requirements) are used to direct credit to specific sectors. Statements A, C, and D are all correct descriptions of OMO operations. -> correct