The type of open-market operation that permanently changes title to the securities traded and makes a permanent change in the level of reserves held by depository institutions is known as a(n):
A) Outright or straight transaction
B) RP or Reverse RP transaction
C) Bills only transaction
D) Reserve multiplier transaction
E) None of the above

Question

Quizplus · Accepted Answer

Outright or straight transactions in open-market operations involve the buying or selling of securities by central banks in a way that permanently changes the level of reserves held by depository institutions. This contrasts with temporary operations like repurchase agreements (RPs) or reverse RPs.

The Type of Open-Market Operation That Permanently Changes Title to the Securities