Explain Dynamic and Defensive Open Market Operations

question 81

Essay

Explain dynamic and defensive open market operations. What is the purpose of each type? Describe two situations when defensive open market operations are used. How are defensive open market operations typically conducted?

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Definitions:

Adrenergic

Relating to nerve cells in which adrenaline (epinephrine) or noradrenaline (norepinephrine) function as neurotransmitters, involved in the body's fight-or-flight response.

Autonomic

Pertaining to the autonomic nervous system, which regulates involuntary bodily functions such as heart rate and digestion.

Blood Vessel

Tubular structures carrying blood through the tissues and organs; a vein, artery, or capillary.

Constrict

To constrict means to narrow or become tighter, often referring to the reduction in diameter of blood vessels or other tubular structures in the body.