When the Reserve Bank engages in open market operations, it is buying or selling
A) securities newly issued by private companies.
B) loans made to banks to meet the legal reserve requirement ratio.
C) capital equipment.
D) government securities.
E) gold.

Question

Quizplus · Accepted Answer

Open market operations involve the buying or selling of government securities by the central bank (such as the Reserve Bank) to control the money supply and influence interest rates.

When the Reserve Bank Engages in Open Market Operations, It