A central bank which sets the short-term rate of interest must: | Faculties

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Vikash Gupta

🎓 Tutor III ⭐ 33.56K Points

📊 Financial Markets and Institutions

Q. A central bank which sets the short-term rate of interest must:

(A) Buy treasury bills
(B) Meet the resulting demand for reserves
(C) Sell government bonds
(D) Change the reserve ratios

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✅ Correct Answer: (B) Meet the resulting demand for reserves

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