Concept: The central bank uses the buying and selling of securities to control the money supply and liquidity in the economy.
Explanation:The buying and selling of government securities by the central bank is known as open market operations, abbreviated as OMO.
Through OMO, the central bank purchases securities to inject money into the banking system and sells securities to withdraw money from circulation.
This tool is used to expand or contract the volume of credit and money in the economy.
It is one of the key quantitative instruments of monetary policy, alongside the bank rate and cash reserve ratio.
In this question, the phrase "buys and sells securities" directly matches the definition of open market operation.
Answer: C. Open market operation.