Question

If the RBI adopts an expansionist open market operations policy, this means that it will :

• A. buy securities from non-government holders
• B. sell securities in the open market
• C. offer commercial banks more credit in the open market
• D. openly announce to the market that it intends to expand credit

Answer 1

Answer:

C. offer commercial banks more credit in the open market

• If the RBI adopts an expansionist open market operations policy, this means that it will offer commercial banks more credit in the open market.