Which of the following statements is true?
A)Open market operations are interventions in the short-term money market by APRA to affect the cash interest rate.
B)Open market operations are interventions in the short-term money market by the RBA to affect the cash interest rate.
C)Open market operations are interventions in the long-term capital market by APRA to affect long-term interest rates.
D)Open market operations are interventions in the long-term capital market by the RBA to affect long-term interest rates.

Question

Quizplus · Accepted Answer

Open market operations refer to the buying and selling of government securities by the central bank (RBA in Australia) in the short-term money market to affect the cash interest rate. APRA does not conduct open market operations as its primary role is to regulate and supervise the financial institutions in Australia. Option C and D are incorrect as open market operations do not typically impact the long-term capital market.

Which of the Following Statements Is True