Open market operations refer to the buying and selling of ________ by the ________ to control the money supply.

Question

Quizplus · Accepted Answer

Open market operations involve the central bank (in this case, the Bank of Canada) buying and selling government securities (such as bonds) in order to influence the amount of money in circulation in the economy. The Ministry of Finance is responsible for government budgeting and taxation, but not for monetary policy. Stocks and bonds refer to securities issued by corporations, rather than by the government, so options C and D are incorrect. Corporate bonds are also not typically part of open market operations, so option E is incorrect.

Open Market Operations Refer to the Buying and Selling of ________