Defensive open-market operations, according to your text, generally result in rising interest rates and reduced availability of credit.

Question

Quizplus · Accepted Answer

Defensive open-market operations are typically aimed at maintaining the current state of liquidity in the banking system, not at altering interest rates or the availability of credit significantly. They are used to offset temporary fluctuations in the bank reserves, keeping the federal funds rate close to the target set by the Federal Reserve, rather than deliberately tightening or loosening credit conditions.

Defensive Open-Market Operations, According to Your Text, Generally Result in Rising