A. Buying and selling of goods in the open market by the government
B. Issuing new shares by companies
C. Lending by commercial banks to the public
D. Buying and selling of government securities by the central bank
Answer: Option D
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.
Explanation:
Second-generation models emphasise that the decision to abandon a peg depends on policy trade-offs; expectations of devaluation can themselves raise the cost of defending the peg, generating self-fulfilling crises and multiple equilibria.
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