Central banks buy and sell government securities instead of

Central banks buy and sell government securities instead of private company stocks and/or bonds, because: O a. The purchase and sale of private company securities does not change a nation\'s monetary base. Only purchases or sales of government securities change the monetary base. O b. Central banks have established communication systems only with the government. O c. They might be accused of favoring one company over another. O d. All the above. O e. None of the above.

Solution

\"D\"

All the given options are correct. Buying or selling the private bond doesn\'t increase or decrease the money supply it just circulate the money. Fed act as a banker to the government and not any private company, if they do they can be accused of favouring an individual company.