The term 'Open Market Operations' refer to: MCQ with Answer and Explanation

The term 'Open Market Operations' refer to:
A. Buying and selling of government securities by the central bank
B. Lending by commercial banks to the public
C. Buying and selling of goods in the open market by the government
D. Issuing new shares by companies
Answer: Option A
Solution (By JKSSB Mock Tests)
Open Market Operations involve the purchase and sale of government securities by the central bank to regulate liquidity and money supply in the economy.

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Practice More Economy Set 1 Questions

Question #1
The 'GST' is a value-added tax because:
A. input tax credit is available
B. it is levied on turnover
C. it is collected at source
D. it is a direct tax

Correct Answer: Option A


Explanation:
GST is a value-added tax because input tax credit avoids cascading.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Goods and Services Tax' on courier services is:
A. 18%
B. 5%
C. 28%
D. 12%

Correct Answer: Option A


Explanation:
Courier services attract 18% GST.

This question belongs to: Economy GK Economy Set 1
Question #3
The Coase theorem suggests that private bargaining can solve externality problems if:
A. the government imposes taxes
B. transaction costs are low and property rights are clearly defined
C. transaction costs are high and property rights are unclear
D. the market is monopolized

Correct Answer: Option B


Explanation:
The Coase theorem states that with low transaction costs and clearly defined property rights, private parties can resolve externalities.

This question belongs to: Economy GK Economy Set 1