If the central bank buys financial securities in the open market to increase the monetary base, this is and example of ?

Correct answer: C. Open Market operations

  • A. lender of less resort
  • B. financial intermediation
  • C. Open Market operations
  • D. Financial regulation

Explanation

Open-market operations are central-bank purchases or sales of government securities. Buying securities injects reserves into the banking system and increases the monetary base.

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