Monetary policy tools include open market operations and reserve requirements from "summary" of Economics of Money, Banking and Financial Markets, Business School by Frederic S. Mishkin
Monetary policy tools play a crucial role in shaping the overall economic landscape. Two primary tools in the hands of central banks are open market operations and reserve requirements. Open market operations involve the buying and selling of government securities in the open market. When the central bank buys government securities, it injects money into the financial system, leading to lower interest rates. Conversely, when the central bank sells government securities, it drains money from the financial system, resulting in higher interest rates. Another essential tool in the realm of m...
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