Economics · Monetary Policy
Assertion (A): The RBI uses open market operations (OMOs) as an instrument to manage macroeconomic liquidity. Reason (R): The buying of government securities by the RBI in the open market leads to a contraction of the money supply. Choose the correct option:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are false
- 2A is false, but R is true
- 3A is true, but R is false✓
- 4Both A and R are true, and R is the correct explanation of A
Correct answer
A is true, but R is false
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