An open market operation by a countrys central bank to reduce the unemployment rate would be to

History

1 answer:

Sloan [31]3 years ago

3 0

Decrease the interest rate and increase the aggregate demand.

Explanation:

If the interest rate is low then the aggregate demand(need for goods and other services) will get increased. Open Market Operations (OMO) is the process of selling or purchasing insurances(securities) to control the money supply in banks all over the country.

When the Fed needs to low interest rate, it purchases the insurances and sells the insurance when it wants to increase the interest rate. The goal of the OMO is to lower unemployment. Since unemployment will result in increasing inflation that in turn increases the interest rate.

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An open market operation by a countrys central bank to reduce the unemployment rate would be to ​

An open market operation by a countrys central bank to reduce the unemployment rate would be to