How do open market operations, as a tool of monetary policy, influence market equilibrium during an expansionary policy?

Open market operations are actions taken by a country's central bank to buy or sell government bonds in the market. During an expansionary monetary policy, the central bank buys bonds, which puts more money into the banking system. This increase in money supply encourages banks to lend more, leading to lower interest rates. With lower interest rates, businesses and consumers are more likely to borrow money, which boosts spending and investment. For example, if a small business can get a loan at a lower interest rate, it might decide to expand and hire more employees, thus helping the overall economy grow.