You visited us 0 times! Enjoying our articles? Unlock Full Access!
Open in App
Solution
Verified by Toppr
Selling of securities in the open market=Extra cash balance ↓ =Money supply↓ (controlled credit creation) Open market operations refers to buying and selling of securities in an open market, in order to affect the money supply in the economy. The selling of securities by Reserve Bank of India will wipe out extra cash balance from the economy, thereby limiting the money supply resulting in controlled credit creation. To summarize,
Was this answer helpful?
6