Which form of monetary policy involves the government's use of open market operations?

Open market operations are a fundamental tool of monetary policy where the government, typically through its central bank, buys or sells government securities in the open market. This action directly influences the money supply and liquidity in the economy.

When the government buys securities, it injects money into the banking system, thereby increasing the money supply. Conversely, selling securities withdraws money from the banking system, reducing the available money supply. This mechanism is crucial for controlling inflation and stabilizing the economy.

The option detailing the influence on money supply recognizes that open market operations are a primary means to adjust the money supply, while the formulation concerning reserve requirements alludes to another method through which monetary policy can affect the banking system's ability to lend.

Combining these methods characterized by B and C highlights the comprehensive approach that authorities can use to navigate economic challenges, making this choice the correct answer.