When economists and bankers speak of open market operations, they are referring to:
A) the purchase or sale of high grade corporate bonds and stocks by the Bank of Canada to the general public.
B) an attempt by the Bank of Canada to affect banks' reserves but not necessarily the money supply.
C) the loans made by the Bank of Canada to members of the Canadian Payments Association.
D) the sale or purchase of government securities by the Bank of Canada.

Question

Quizplus · Accepted Answer

Open market operations involve the buying or selling of government securities by a central bank (such as the Bank of Canada) to control the money supply and interest rates.

When Economists and Bankers Speak of Open Market Operations, They