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The Central Bank uses the _____ to control the amount of money in circulation.
  • a)
    Repo Rate
  • b)
    Bank Rate
  • c)
    Open Market Operations (OMO)
  • d)
    Reverse Repo Rate
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
The Central Bank uses the _____ to control the amount of money in circ...
Open Market Operations (OMO) are used by the central bank to control the amount of money in circulation. In OMO, the central bank buys or sells government securities in the open market. When the central bank purchases government securities, it injects money into the system, increasing the money supply. Conversely, when it sells government securities, it absorbs money from the system, decreasing the money supply.
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