In the context of Indian economy, open market operations to : borrowing by scheduled banks from RBI lending by commercial banks to industry and trade purchase and sale of government securities by the RBI None of the above Select the correct answer using the codes given below : Options: A . &nbsp3 only B . &nbsp4 and 1 only C . &nbsp1 and 2 only D . &nbsp2 and 3 only

In the context of Indian economy, open market operations to : borrowing by sched

Question

In the context of Indian economy, open market operations to :

borrowing by scheduled banks from RBI
lending by commercial banks to industry and trade
purchase and sale of government securities by the RBI
None of the above

Select the correct answer using the codes given below :

Options:

A . 3 only

B . 4 and 1 only

C . 1 and 2 only

D . 2 and 3 only

Answer: Option A
Answer: (a)Open market operation : When RBI buys/sells securities in open market, in case of OMO, first party permanently sells the Government security to second party. Second party is free to do whatever it wants with that security.

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