How do open market operations primarily affect the money supply in an economy?

Open market operations are actions taken by a country's central bank to buy or sell government securities, like bonds, to influence the money supply in the economy. When the central bank buys these securities, it injects money into the economy, increasing the amount of money available for banks to lend. This can lead to lower interest rates, encouraging businesses and consumers to borrow and spend more, which helps stimulate economic growth. For example, if the central bank buys $1 million in bonds, it adds that money to the banking system, allowing banks to lend more money to people for homes or cars. On the other hand, if the central bank sells bonds, it takes money out of the economy, reducing the money supply and potentially raising interest rates.