Open-market operations are often a more effective method for the Federal Reserve System to expand the money supply than is minting more dollars and coins.

Question

Quizplus · Accepted Answer

Open-market operations involve the purchase of government securities by the Federal Reserve, which injects new money into the banking system and stimulates lending and spending. This method can be more targeted and precise in its effects on the money supply compared to simply creating more physical currency. Additionally, minting more dollars and coins can lead to inflation if there is not enough demand for the increased supply.

Open-Market Operations Are Often a More Effective Method for the Federal