Which of the following situations is likely to lead to dynamic open market operations?
A) A recession
B) An increase in Federal Reserve float
C) An increase in Treasury cash holdings
D) An increase in currency outstanding

Question

Quizplus · Accepted Answer

Dynamic open market operations are more likely to occur during times of economic uncertainty, such as a recession. During a recession, the Federal Reserve may increase or decrease the money supply by buying or selling securities in the open market to stimulate or slow down economic activity. The other choices listed are not necessarily related to dynamic open market operations.

Which of the Following Situations Is Likely to Lead to Dynamic