Open market transactions involve which of the following activities?
I. issuing new Federal Reserve notes
II. buying or selling newly issued government bonds to raise funds for the government
III. buying or selling previously issued government bonds to change the volume of bank reserves
A) I only
B) II only
C) III only
D) II and III only .
E) I, II ,and III

Question

Open market transactions involve which of the following activities? 
I. issuing new Federal Reserve notes
II. buying or selling newly issued government bonds to raise funds for the government
III. buying or selling previously issued government bonds to change the volume of bank reserves
A) I only
B) II only
C) III only
D) II and III only .
E) I, II ,and III

Quizplus · Accepted Answer

Open market transactions refer to the buying or selling of previously issued government bonds by the Federal Reserve to influence the level of bank reserves and control the money supply.

Open Market Transactions Involve Which of the Following Activities