No Registration Required

Open Market Operations Quiz

1 completions

100%

(1)

Generated by AI

1. What is the primary tool of monetary policy used by Central Banks?

2. When the Central Bank performs Open Market Operations, what does it buy or sell?

3. What happens to the money supply when the Central Bank buys government bonds?

4. What happens to the money supply when the Central Bank sells government bonds?

5. Which of the following best describes the secondary market?

6. Why would the Central Bank want to increase money supply?

7. Why would the Central Bank want to decrease money supply?

8. What effect does an increase in the money supply have on interest rates?

9. What typically happens to interest rates when the money supply is decreased by selling government bonds?

10. Which of the following factors could influence the effectiveness of open market operations?