Open market operations are the
A) borrowing of reserves by the Reserve Bank from the banking system.
B) purchase or sale of government securities by the Reserve Bank.
C) minimum percentage of loans that banks must retain as reserves in the open market.
D) lending of reserves to the banking system by the Reserve Bank.
E) purchase or sale of gold by the Reserve Bank.

Question

Quizplus · Accepted Answer

Open market operations involve the purchase or sale of government securities by the central bank (in many countries referred to as the Reserve Bank) to control the money supply and influence interest rates.

Open Market Operations Are the