Question

Q. Which of the following statements is/are correct about Operation Twist?

Select the correct code from the options given below:

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 nor 2

Answer 1

The correct option is A 1 only

Explanation:

Operation Twist first appeared in 1961 as a way to strengthen the U.S. dollar and stimulate cash flow into the economy. In June 2012, Operation Twist was so effective that the yield on the 10-year U.S. Treasury dropped to a 200-year low.

Statement 1 is correct: In operation twist, central banks sell short-term government securities and buy long-term government securities at the same time.

Statement 2 is incorrect: There is nothing like this that is done by the central bank.