If the FOMC's directive indicates a change in monetary policy, the account manager at the Fed's Open Market Trading Desk must
A)design dynamic open market operations.
B)design defensive open market operations.
C)seek approval of the change from the Secretary of the Treasury.
D)seek approval of the change from a majority of the presidents of the Federal Reserve district banks.

Question

Quizplus · Accepted Answer

If the FOMC's directive indicates a change in monetary policy, the account manager at the Fed's Open Market Trading Desk must design dynamic open market operations to implement the change in policy. Defensive open market operations are used to counteract unexpected market disturbances and are not relevant in this situation. Seeking approval from the Secretary of the Treasury or the presidents of the Federal Reserve district banks is not necessary as the FOMC has the authority to make decisions on monetary policy.

If the FOMC's Directive Indicates a Change in Monetary Policy