Indian Economy Questions

Open market operations (OMO) refer to the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system.

Direct Materials doesn't come under Fixed Cost because it vary with changes in the activity level of a business.

Fixed Cost :

A fixed cost is a cost that does not change over the short-term, even if a business experiences changes in its sales volume or other activity levels.

It is of some importance to understand the extent and nature of the fixed costs in a business, since a high fixed-cost level requires a business to maintain a high revenue level in order to avoid generating losses.

Examples of Fixed Cost are:

Insurance, Salaries, Rent, Property Taxes,...

All the three statements lead to either increase in demand of goods and services or decrease in the supply. This leads to increase in general level of prices.