Open Market Operations refer to: MCQ with Answer and Explanation

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Open Market Operations refer to:

A. sale and purchase of government securities by the RBI

B. lending by commercial banks to customers

C. trading in stock exchanges

D. issue of new currency notes

Answer: Option A

Solution (By JKSSB Mock Tests)

Open Market Operations are the sale and purchase of government securities by the RBI to regulate liquidity.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

Which of the following is a type of foreign capital inflow?

A. Only government tax revenue

B. Foreign direct investment, portfolio investment and external commercial borrowings

C. Only domestic equity issuance

D. Domestic bank deposits of residents

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Correct Answer: Option B

Explanation:
Foreign capital inflows include FDI, FPI, external commercial borrowings, trade credit and other external liabilities.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'GST Council' does not deal with:

A. income tax rates

B. GST exemptions

C. GST rates

D. GST returns

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Correct Answer: Option A

Explanation:
Income tax rates are not within GST Council's purview.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the 'Wealth Inequality' literature associated with Piketty?

A. Capital accumulation always reduces inequality

B. Only labour income inequality matters

C. Wealth inequality always declines with development

D. When the rate of return on capital exceeds the growth rate of the economy, wealth inequality tends to rise

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Correct Answer: Option D

Explanation:
Piketty’s central argument is that when the rate of return on capital (r) systematically exceeds the growth rate of the economy (g), the share of capital in national income and the concentration of wealth tend to increase.

This question belongs to: Economy GK Economy Set 1

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