When the Reserve Bank Buys Securities in Open Market Operations,it

question 12

Multiple Choice

When the Reserve bank buys securities in open market operations,it

• A)pays with newly created deposits.
• B)pays with new banks notes.
• C)pays for the securities with gold.
• D)pays with newly created bank reserves,which increases the monetary base.
• E)pays for the securities with an increase in the monetary quantity.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Global Economy

An interconnected world economy where goods, services, and financial capital move across national borders, influenced by global events and policies.

Structural Reasons

Fundamental causes or conditions related to the organization or structure of a system, process, or entity.

Unemployed

The state of being without a job despite being willing to work, typically measured as a percentage of the labor force.