Question : Which of the following statement are true?
- Sale of securities through open market operations reduces the reserves of commercial banks.
- Purchase of securities by central bank increase the the reserves and raises the banks ability to give credit.
Option 1: Both are true.
Option 2: Both are false.
Option 3: Statement 1 is true, statement 2 is false.
Option 4: Statement 1 is false, statement 2 is true.
Answer (1)
19th Jan, 2024
Correct Answer:
Both are true.
Solution :
Sale of securities through open market operations reduces the reserves of commercial banks.
Purchase of securities by central bank increase the the reserves and raises the banks ability to give credit.
Hence, Option A is correct.
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