Open market operations involve the buying and selling of U.S. government securities.

Question

Quizplus · Accepted Answer

Open market operations are a monetary policy tool used by the Federal Reserve to influence the money supply in the economy. They involve the buying and selling of U.S. government securities, such as Treasury bonds, on the open market. When the Fed buys securities, it effectively injects cash into the economy, increasing the money supply. When it sells securities, it removes cash from the economy, decreasing the money supply.

Open Market Operations Involve the Buying and Selling of U