Open market operations is the buying and selling of government securities to increase or decrease bank reserves.

Question

Quizplus · Accepted Answer

Open market operations refer to the buying and selling of government securities by the central bank in order to influence the supply of money in the economy and hence bank reserves. When the central bank buys securities, it injects money into the economy, increasing bank reserves, and vice versa.

Open Market Operations Is the Buying and Selling of Government