Respuesta :
Open market operations, by definition, involve (2) the purchase or sale of bonds by a central bank.
What are open market operations?
- An open market operation is a macroeconomic activity conducted by a central bank to provide liquidity in its currency to a bank or group of banks.
- The Federal Reserve's open market operations (OMOs)—the purchase and selling of assets in the open market by a central bank— are a major tool in the implementation of monetary policy.
- The Federal Open Market Committee establishes the short-term goal for open market operations (FOMC).
- The benefits of open market operations are well understood.
- The instrument allows the central bank to be quite flexible in terms of the timing and magnitude of monetary policy operations.
- It avoids the economic and market inefficiencies associated with direct controls.
As the definition itself says that open market operations are the purchase and selling of assets in open markets by the central bank.
Therefore, the correct option is (2) the purchase or sale of bonds by a central bank.
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Correct question:
Open market operations, by definition, involve the Group of:
- Federal Reserve dictating the discount rate to influence the money supply
- purchase or sale of bonds by a central bank
- loaning of deposits between private banks
- purchase of securities from the U.S. Treasury
- sale of Federal Reserve notes.
