UPSC Exam > UPSC Questions > With reference to Open Market Operations(OMO)...
Start Learning for Free
With reference to Open Market Operations (OMO), consider the following statements:
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
2. Its objective is to regulate the money supply in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
Which of the statements given above is/are correct?
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
2. Its objective is to regulate the money supply in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
Which of the statements given above is/are correct?
- a)1 and 2 only
- b)1 and 3 only
- c)2 only
- d)1, 2 and 3
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
With reference to Open Market Operations(OMO), consider the following ...
RBI deals with banks and other financial institutions for open market operations. RBI does not deal with the public directly.
Most Upvoted Answer
With reference to Open Market Operations(OMO), consider the following ...
Open Market Operations (OMO) is a monetary policy tool used by the Reserve Bank of India (RBI) to regulate the money supply in the economy. It involves the sale and purchase of government securities and treasury bills by the RBI in the open market.
The following statements are given about OMO:
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
This statement is correct. OMO involves the sale and purchase of government securities and treasury bills by the RBI in the open market. When the RBI buys government securities, it injects money into the economy, increasing the money supply. When it sells government securities, it absorbs money from the economy, decreasing the money supply.
2. Its objective is to regulate the money supply in the economy.
This statement is also correct. The main objective of OMO is to regulate the money supply in the economy. By buying or selling government securities, the RBI can influence the liquidity in the banking system, which in turn affects the interest rates and inflation levels in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
This statement is incorrect. The RBI does not deal with the public directly in open market operations. It conducts OMO through authorized dealers, who are primarily banks and financial institutions. These dealers participate in auctions conducted by the RBI to buy or sell government securities.
Therefore, the correct answer is option 'A' - 1 and 2 only. OMO is an important tool for the RBI to regulate the money supply in the economy and maintain price stability.
The following statements are given about OMO:
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
This statement is correct. OMO involves the sale and purchase of government securities and treasury bills by the RBI in the open market. When the RBI buys government securities, it injects money into the economy, increasing the money supply. When it sells government securities, it absorbs money from the economy, decreasing the money supply.
2. Its objective is to regulate the money supply in the economy.
This statement is also correct. The main objective of OMO is to regulate the money supply in the economy. By buying or selling government securities, the RBI can influence the liquidity in the banking system, which in turn affects the interest rates and inflation levels in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
This statement is incorrect. The RBI does not deal with the public directly in open market operations. It conducts OMO through authorized dealers, who are primarily banks and financial institutions. These dealers participate in auctions conducted by the RBI to buy or sell government securities.
Therefore, the correct answer is option 'A' - 1 and 2 only. OMO is an important tool for the RBI to regulate the money supply in the economy and maintain price stability.
Attention UPSC Students!
To make sure you are not studying endlessly, EduRev has designed UPSC study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in UPSC.
|
Explore Courses for UPSC exam
|
|
Similar UPSC Doubts
Top Courses for UPSCView all
With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer?
Question Description
With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer?.
With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer?.
Solutions for With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer?, a detailed solution for With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice With reference to Open Market Operations(OMO), consider the following statements:1. It refers to the sale and purchase ofgovernment securities and treasurybills by RBI.2. Its objective is to regulate the moneysupply in the economy.3. RBI deals with the public directly tocarry out Open Market Operations.Which of the statements given above is/arecorrect?a)1 and 2 onlyb)1 and 3 onlyc)2 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice UPSC tests.
|
|
Explore Courses for UPSC exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup