An open market purchase of government securities by the Reserve Bank of Australia causes the reserves of banks to rise.

Name: An open market purchase of government securities by the Reserve Bank of Australia causes the reserves of banks to rise.
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Question

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When the Reserve Bank of Australia purchases government securities from the open market, it injects money into the banking system. This increases the reserves of banks, which can then lend out more money, leading to increased economic activity.

An Open Market Purchase of Government Securities by the Reserve