Economics · Monetary Policy
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: Central banks use government securities as a tool for implementing monetary policy through Open Market Operations (OMO). Reason R: By buying or selling government securities in the open market, central banks can influence the money supply and interest rates. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is not correct but R is correct
- 2Both A and R are correct and R is the correct explanation of A✓
- 3A is correct but R is not correct
- 4Both A and R are correct but R is NOT the correct explanation of A
Correct answer
Both A and R are correct and R is the correct explanation of A
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