Open market operations that represent an attempt to offset short-term fluctuations in bank reserves are known as
A) defensive open market operations.
B) dynamic open market operations.
C) temporary open market operations.
D) equilibrating open market operations.

Question

Quizplus · Accepted Answer

Defensive open market operations are conducted by central banks to offset short-term fluctuations in bank reserves, aiming to maintain the stability of the financial system and control the money supply. These operations are not meant to change the monetary policy direction but to smooth out the day-to-day fluctuations in the demand for and supply of reserves.

Open Market Operations That Represent an Attempt to Offset Short-Term