Correct Answer: purchase and sale of government securities by RBI

Solution : The correct answer is the p urchase and sale of government securities by RBI.

A central bank's open market activities are the purchases and sales of government securities. This is a mechanism used by central banks to manipulate the money supply and interest rates.

A central bank injects money into the economy when it purchases government assets. This may result in reduced interest rates. When a central bank sells government securities, money is taken out of the economy. This may result in increased interest rates.