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WAEC Commerce 1991 (August) Question 38

Question 38

Banking

The technique of controlling money supply through the purchase and sale of government bonds is called

  1. A.bond control technique
  2. B.exchange control technique
  3. C.open market operations
  4. D.price control mechanism
  5. E.span of control technique
Show the answer and explanation

Answer: C (open market operations)

Explanation

Open market operations are the central bank's buying and selling of government securities.