How does central bank control availability of credit by open market op

1.	How does central bank control availability of credit by open market operations?
Answer» 1. Open Market Operation consists of buying and selling of government securities and bonds in the open market by central bank. 2. To control availability of credit, central bank sells government securities and bonds to commercial bank. 3. With the sale of these securities, the power of commercial banks of giving loans decreases.

How does central bank control availability of credit by open market operations?

Answer»

1. Open Market Operation consists of buying and selling of government securities and bonds in the open market by central bank.

2. To control availability of credit, central bank sells government securities and bonds to commercial bank.

3. With the sale of these securities, the power of commercial banks of giving loans decreases.

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How does central bank control availability of credit by open market operations?

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