Open market operations refer to the buying and selling of government securities by the central bank in order to control the money supply and interest rates.
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Discount Rates: The discount rate is the interest rate charged by the central bank on loans provided to commercial banks. It serves as a tool for controlling borrowing costs and influencing monetary policy.
Reserve Requirements: Reserve requirements are regulations that determine how much money banks must hold in reserve against their deposits. By adjusting these requirements, the central bank can influence lending capacity and overall liquidity in an economy.
Money Supply: The money supply refers to all physical currency (coins and notes) in circulation along with demand deposits held by individuals and businesses. It is an important indicator of economic activity and inflationary pressures.