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What are Open Market Operations?

12. What are Open Market Operations?

1. Sale of agricultural products in the government regulated Mandis
2. Sale and purchase of bonds and securities by the RBI to the government
3. Sale and purchase of bonds and securities by commercial banks to the customers
4. Sale and purchase of bonds and securities to commercial banks by the RBI

Answer: D) Sale and purchase of bonds and securities to commercial banks by the RBI

Explanation:

Open market operations (OMO) allude to the Federal Reserve (the Fed) practice of trading U.S. Depository protections, alongside different protections, on the open market to manage the stock of cash that is on hold in U.S. banks. The Fed buys Treasury protections to expand the stock of cash and offers them to lessen the stockpile of cash.