The point of Open Market Operations is to
A)influence stock prices.
B)increase or decrease the money supply so as to influence interest rates.
C)increase or decrease the value of gold as to influence the value of foreign currency.
D)influence oil prices.

Question

Quizplus · Accepted Answer

Open Market Operations are a tool used by central banks to manage the money supply and influence interest rates. The central bank buys or sells government securities in the open market to increase or decrease the reserves held by banks, which in turn affects the level of money available for lending and borrowing, and ultimately impacts interest rates. The goal of such operations is to achieve monetary policy objectives such as price stability, full employment, and economic growth. Open Market Operations do not have a direct impact on stock prices, gold prices, or oil prices.

The Point of Open Market Operations Is to