Open market sales shrink ________ thereby lowering ________. A) the money multiplier; the money...
Question:
Open market sales shrink _____ thereby lowering _____.
A) the money multiplier; the money supply
B) the money multiplier; reserves and the monetary base
C) reserves and the monetary base; the money supply
D) the money base; the money multiplier
Open Market Operation
Open market operations are usually the primary tool used by central banks to implement monetary policy. Apart from providing banks with liquidity and occasionally removing surplus liquidity of commercial banks, the main goal of open market operations is just to influence the short-term rate of interest as well as the supply of base money in the economy.
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Open Market Operations | Overview, Definition & Examples
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Chapter 12 / Lesson 3
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Learn about open market operations and understand how the federal reserve plays a role. See open market operations examples and how they impact the economy.
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