Concept:Expansionary monetary policy aims to increase the money supply in the economy.
Explanation:The Central Bank of Nigeria (CBN) uses expansionary monetary policy when it wants to increase the volume of money in circulation and encourage commercial banks to lend more.
Lowering income taxes is a fiscal policy tool, not a monetary policy tool, so Option A is incorrect.
Increasing the discount rate makes borrowing from the CBN more expensive for banks, which reduces the money supply; this is a contractionary measure.
Increasing the reserve ratio reduces the amount that commercial banks can lend out, so this also contracts the money supply.
When the CBN buys Treasury securities from commercial banks, it pays cash to the banks, thereby increasing their reserves.
Banks can then extend more loans, and the amount of money circulating in the economy expands.
Therefore, buying Treasury securities is the expansionary open market operation among the given options.
Answer:D. Buying Treasury securities from commercial banks.