Open-market operations refers to:
A)purchases of stocks in the Toronto Stock Exchange.
B)the purchase or sale of government bonds by the Bank of Canada.
C)central bank lending to chartered banks.
D)the specifying of margin requirements on stock purchases.

Question

Quizplus · Accepted Answer

Open-market operations refer to the purchase or sale of government bonds by the central bank, which in Canada is the Bank of Canada. This is one of the tools that the central bank uses to implement monetary policy and influence interest rates in the economy. Purchases of stocks (A) on the Toronto Stock Exchange, central bank lending to chartered banks (C), and specifying margin requirements (D) are not open-market operations.

Open-Market Operations Refers To