Economics Q198

0. In an effort to influence the economy, a central bank conducted open market activities by buying government bonds. This implies that the central bank is most likely attempting to:

Answer
Comment
Array

Option : A
Explanation : Buying government bonds results in an increase of the bank’s reserves and increases banks’ ability to lend, causing an increase in money growth through the multiplier mechanism and results in an expansion in the economy.

Forgot your password?

I agree with the Terms.