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In order to conduct an expansionary open market operation, the central bank sells bonds in the bond market.
- a)True
- b)False
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
In order to conduct an expansionary open market operation, the central...
- An expansionary OMO aims to expand the money supply and in- duce economic activity increasing output and income.
- When the Central Bank sells bonds it collect money in exchange which would contract the money supply not expand it.
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Most Upvoted Answer
In order to conduct an expansionary open market operation, the central...
False.
Explanation:
An expansionary open market operation is a monetary policy tool used by the central bank to stimulate economic growth. This involves the purchase of government securities or bonds from the open market by the central bank. The purchase of these securities increases the money supply in the economy and reduces the interest rates, making it easier for businesses and individuals to borrow money and invest. Therefore, the correct statement would be that in order to conduct an expansionary open market operation, the central bank buys bonds in the bond market.
Explanation:
An expansionary open market operation is a monetary policy tool used by the central bank to stimulate economic growth. This involves the purchase of government securities or bonds from the open market by the central bank. The purchase of these securities increases the money supply in the economy and reduces the interest rates, making it easier for businesses and individuals to borrow money and invest. Therefore, the correct statement would be that in order to conduct an expansionary open market operation, the central bank buys bonds in the bond market.
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In order to conduct an expansionary open market operation, the central bank sells bonds in the bond market.a)Trueb)FalseCorrect answer is option 'B'. Can you explain this answer?
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In order to conduct an expansionary open market operation, the central bank sells bonds in the bond market.a)Trueb)FalseCorrect answer is option 'B'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about In order to conduct an expansionary open market operation, the central bank sells bonds in the bond market.a)Trueb)FalseCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In order to conduct an expansionary open market operation, the central bank sells bonds in the bond market.a)Trueb)FalseCorrect answer is option 'B'. Can you explain this answer?.
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