Question

Which of the following is true of open market operations? Select the correct answer below: Open market operations involves the buying and selling of stocks on the New York Stock Exchange Open market operations target the amount of currency in the market. Open market operations involve the purchase and sale of government securities. Open market operations is the process of changing the reserve ratio in the banking system.

Answer 1

Answer:

Open market operations involve the purchase and sale of government securities

Explanation:

Base on the scenario been described in the question, the option that is true for open market operation is Open market operations involve the purchase and sale of government securities

An open market operation (OMO) is an activity by a central bank to give (or take) liquidity in its currency to (or from) a bank or a group of banks.

Answer 2

Answer:

The option that says; "Open market operations involve the purchase and sale of government securities".

Explanation:

The term "open market operation" simply has to do with monetary policy. Open market operation is usually considered as a tool in economics and It is a commonly used by central banks of countries or federal reserves.

The main thing that happens in open market operation is that Government securities are being bought and sold that is the purchase and sale of government securities. The selling and buying of government securities is to make sure that there is reduction in the way money is been supplied.