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    Question

    What strategic advantage does the selling of Sovereign Gold Bonds (SGBs) by the Reserve Bank of India provide to the country's economy?

    A Direct investment in infrastructure development Correct Answer Incorrect Answer
    B Reduction in the physical demand for gold and saving on import bills Correct Answer Incorrect Answer
    C Increase in foreign currency reserves Correct Answer Incorrect Answer
    D Enhancement of the gold recycling process Correct Answer Incorrect Answer
    E Stabilization of the stock market Correct Answer Incorrect Answer

    Solution

    Selling SGBs helps in reducing the physical demand for gold, thereby saving on the import bill for the precious metal, which in turn supports the country’s economy by decreasing the outflow of foreign exchange.

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