alleryMatch OMO actions: 1. Buy: p. Add money 2. Sell: q. Drain base 3. Open: r. Market OMO
A1-p, 2-q, 3-r
B1-p, 2-r, 3-q
C1-q, 2-p, 3-r
D1-r, 2-p, 3-q
Answer & Solution
Correct answer: A. 1-p, 2-q, 3-r
When the central bank buys securities it creates money, whereas selling securities reduces the monetary base.
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