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The Central Bank Monetary policy instrument by which it buys and sells securities is called

Commerce
JAMB 2018

The Central Bank Monetary policy instrument by which it buys and sells securities is called

  • A. Bank rate
  • B. Cash reserve ratio
  • C. Open market operation
  • D. Bank credit
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Correct Answer: Option C
Explanation

Open market operations (OMO) refer to the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system.

Open Market Operations. Definition: The Open Market Operations refers to the sale and purchase of government securities and treasury bills by the central bank of the country with a view to regulate the supply of money in the economy.


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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC offline past questions - with all answers and explanations in one app - Download for free
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC offline past questions - with all answers and explanations in one app - Download for free
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts