The major purpose of the Bank of Canada buying and selling government securities in open market operations is to:

Question

Quizplus · Accepted Answer

The primary purpose of open market operations is to achieve the desired interest rate. By buying or selling government securities, the Bank of Canada can influence the supply of money in the economy, which in turn affects interest rates. If the Bank of Canada wants to lower interest rates, it can buy government securities, which increases the money supply and puts downward pressure on interest rates. Conversely, if it wants to raise interest rates, it can sell government securities, which reduces the money supply and puts upward pressure on interest rates.

The Major Purpose of the Bank of Canada Buying and Selling