In the money supply process, open market operations initially affect which of the following?

Question

Quizplus · Accepted Answer

Open market operations involve the purchase or sale of government securities by the central bank to adjust the amount of reserves held by depository institutions. Therefore, the initial effect of open market operations is on the supply of reserves available to depository institutions. This influences their ability to create deposits and make loans, which ultimately affects credit availability and lending.

In the Money Supply Process, Open Market Operations Initially Affect