What are open market operations?
An example of an AI chatbot conversation about open market operations in economics.
What are open market operations?
Open market operations are activities by a central bank to buy or sell government securities in the open market.
How do they affect interest rates?
They influence interest rates by altering the amount of money in the banking system, which affects lending.
Can you give an example of how this works?
Sure! If the central bank buys securities, it injects money into the economy, lowering interest rates.
What is the goal of these operations?
The goal is to regulate money supply and stabilize the economy, often targeting inflation and employment.
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