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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