Open market operations alter the money supply by ________.
A)influencing banks' ability to make loans to individuals and corporations
B)adding currency to or withdrawing currency from banks' vaults
C)adding currency to or withdrawing currency from the checking accounts of individuals and corporations
D)influencing banks' ability to make loans to the government
E)none of the above

Question

Quizplus · Accepted Answer

Open market operations involve the buying and selling of government securities by a central bank, which influences the reserves of banks and thus their ability to make loans, affecting the money supply.

Open Market Operations Alter the Money Supply by ________