Open market operations refer to:
A) the buying and selling of stocks in the stock market.
B) the buying and selling of government bonds by the Fed.
C) decisions by the Fed to raise or lower interest rates.
D) decisions by the Fed to increase or decrease the money multiplier.

Question

Quizplus · Accepted Answer

Open market operations refer to the buying and selling of government bonds by the Fed. The Fed uses open market operations to influence the supply and demand for money, and to control the federal funds rate. This is the most commonly used monetary policy tool by the Fed.

Open Market Operations Refer To