Open Market Operations,by Definition,involve the

question 94

Multiple Choice

Open market operations,by definition,involve the

• A) purchase or sale of bonds by a central bank.
• B) Federal Reserve dictating the discount rate to influence the money supply.
• C) purchase of securities from the U.S.Treasury.
• D) loaning of deposits between private banks.
• E) sale of Federal Reserve notes.

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Definitions:

Per Annum

Annually; indicating an amount or a statistical value per year.

Equivalent

Identical in worth, quantity, role, significance, and so forth.

Term Deposits

Fixed amount of money held at a financial institution for a fixed term, earning a guaranteed interest rate.

Simple Interest

Simple interest is a method of calculating the interest charge on a loan based on the original principal amount and the interest rate, without compounding.