Which of the following is used by the Central Bank to control the rate of interest?
Bill of Exchange
Banker's order
Fixed deposit account
Open market operation
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One way central banks do this is by controlling the amount of money circulating in the economy. They can do this by influencing interest rates, setting reserve requirements, and employing open market operation tactics, among other approaches
Open market operations is where the federal government through the central bank buys and sells government securities to control the money supply and interest rates.
The right answer is D
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.
This are all repeated questions and answers , don't be confused
The right answer is capital D
Greetings, The Myschool Team.
The correct answer is D(open market operation) and not B(banker's order). Banker's order is an instruction given to a bank to make regular payments to a specified account, usually by the account holder. This has nothing to do with rate of interest. Open market operation however, is a fiscal policy measure in which government securities are bought and sold in order to reduce or increase the supply of money(indirectly affecting interest rates) in a bid to control inflation or deflation. Thus, D(open market operation) is the most appropriate answer. Thank you.
