Open Market Operations Refer to the Buying or Selling of Bonds

question 89

True/False

Open market operations refer to the buying or selling of bonds by the central bank.

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Definitions:

Future Value

The predicted amount of money that a current investment will grow to at a certain future date, based on an assumed rate of growth or interest rate.

Interest

Interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Rule of 70

A formula to estimate the number of years required to double the value of something at a constant growth rate, calculated as 70 divided by the growth rate.

Interest

The cost incurred for the benefit of borrowing funds, usually presented as a yearly percentage rate.