When a government buys its own securities on the open market, it is employing ________.

Question

Quizplus · Accepted Answer

The act of a government buying its own securities on the open market is a tool used in monetary policy. This type of action is known as open market operations, which is typically conducted by central banks to increase or decrease the money supply in the economy. By buying its own securities, the government can increase the amount of money in circulation, which can stimulate economic growth, or decrease the amount of money in circulation, which can help combat inflation. Fiscal policy, on the other hand, involves the government's use of taxation and spending to influence economic growth, while global policy is a broad term that encompasses various international policies and agreements. The law of one price refers to the economic principle that identical goods should have identical prices in different markets.

When a Government Buys Its Own Securities on the Open