Central Bank sells Government securities A. To Decrease credit B. To control inflation C. To control credit D. To boost economy
Question
Central Bank sells Government securities A. To Decrease credit B. To control inflation C. To control credit D. To boost economy
Solution
The Central Bank sells Government securities for several reasons:
A. To Decrease credit: When the Central Bank sells government securities, it is essentially taking money out of the financial system. This reduces the amount of money available for banks to lend, thus decreasing credit.
B. To control inflation: By selling government securities, the Central Bank can reduce the amount of money in circulation. This can help to control inflation by reducing the amount
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