Macro

Money & Banking

Medium

The process of Buying and selling of bonds issued by the Government by the central bank is called.

Open Market Operations.

Credit Creation.

Money Supply.

Reverse Repurchase.

✅ Correct Option: 1

Option 1 -> The buying and selling of government bonds by the central bank to regulate money supply.

Option 2 -> The process by which commercial banks create money through lending based on deposits.

Option 3 -> The total amount of money available in the economy at a given time.

Option 4 -> A specific tool where the central bank borrows from banks by selling securities temporarily.

Hence, Option 1: Open Market Operations -> Open Market Operations (OMO) is a monetary policy tool used by central banks to control liquidity and money supply in the economy. When the central bank buys government bonds from the market, it injects money into the economy (expansionary policy). When it sells government bonds, it absorbs money from the economy (contractionary policy). This is one of the most important and frequently used tools for monetary management. -> correct

2025: 27 May Shift 2

Central Bank is a very important institution in a modern economy. Almost every country has one central bank. India got its central bank in ......

2026: 13 May Shift 2

Exchange of commodities without the mediation of money is called as?

2022: 10 Aug Shift 2

If the reserve ratio is 10% and the initial deposit with the commercial banks are Rs. 450 cr, the total money creation by the banking system will be :

2026: 11 May Shift 2

Arrange the following statements related to open market operations, a tool used by the Reserve Bank of India to control money supply in the economy, in the correct order of occurrence:

A. The total amount of reserves in the economy increases.

B. RBI buys government bonds.

C. As a result, money supply will increase.

D. RBI pays for the bonds by providing a cheque.

Choose the correct answer from the options given below:

2025: 28 May Shift 1

Which of the following statements is correct about commercial banks ?

A. Considered as Money Creating system of the Indian Economy

B. They accept deposits from the public at a lower interest rate and lend out part of these funds at a higher interest rate

C. The difference between the interest rate paid to depositors and charged for lending is called "Spread".

D. Commercial banks in isolation control the money supply in India.

Choose the correct answer from the options given below:

(A), (B), (C) and D
(A), (B) and (D) only
(A), (B) and (C) only
(A) and (D) only

2025: 14 May Shift 1

The classification of money in terms of narrow and broad money is due to .....

The process of Buying and selling of bonds issued by the Government by the central bank is called.

Solution

Related questions:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)