What is it called when the central bank purchases financial assets in the open market to expand the monetary base?

Choose the correct answer

Explanation

When the central bank buys securities in the open market to increase the money supply, this action is known as open market operations. It is a key monetary policy tool used to influence liquidity and interest rates. The other options refer to different financial concepts: lender of last resort involves emergency funding, financial intermediation is about channeling funds between savers and borrowers, and financial regulation pertains to oversight of financial entities.

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