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Ratios and OMO

When RBI does...

Question

When RBI does some open market operation transactions, it wishes to regulate which of the following?

A

Inflation

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B

Supply of money in the economy

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C

Borrowing power of the commercial banks

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D

A & B

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Solution

The correct option is D
A & B

Open market operation transactions are done by RBI to regulate both inflation and money supply.

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