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By Using Open Market Operations,the Reserve Bank

Question 36

Multiple Choice

By using open market operations,the Reserve Bank


A) adjusts the demand for reserves to keep bank rates in line with the cash rate target.
B) adjusts the supply and demand of reserves to keep the cash rate equal to its target.
C) controls banks' demand for reserves,thereby keeping the cash rate equal to its target.
D) adjusts the supply of reserves to keep the cash rate equal to its target.
E) None of the above answers is correct.

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