Question

What are open market operations and how do they impact the money supply, outstanding treasury notes, and bond values? What is quantitative easing?What are open market operations and how do they impact the money supply, outstanding treasury notes, and bond values? What is quantitative easing?

Answer 1

Open market operating when the central Bank of the economy eg. Federal Reserve in the United States buys. og sells government Securitieg to the oken maaket to regulate the money supply, this is called OPEN MARKET OPERATIONS Fed (Canteral Bank) purchases the government Securities when it want to increase money Supply in the economy and sells the government Security when it wants to reduce the money supply When fed bugs the securities, there is more money supply, more loans are available for consumers and interest rates are down. & vice versa. unconventualmonetary The policy / strategy of Central bank to government Securities to increase money Supply when open market operations are not very useful is called quantitative Easing (8E). E applies when interest rate are already zero Thank you, Request for positive review