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Explain the role of the following in correcting the deficient demand in an economy: Open market operations
Explain the role of the following in correcting the deficient demand in an economy: Open market operations
Open market operations in correcting the deficient demand in an economy – Open market operations is the sale and purchase of the government and other approved securities by the central bank to the commercial bank and other financial establishments. When the cash balance is to be increased in the economy, especially during the situation of deficient demand, the central bank tends to purchase more securities.