Which of the following is a tool of the Federal Reserve System?
A) Buying or selling stocks of publicly traded corporations in order to stabilize the stock market
B) Performing open market operations in order to stimulate the economy during recessions and prevent inflation.
C) Reducing the burden of household debt by capping credit card and other loan interest rates at reasonable levels.
D) Encouraging employment by lending money at a low ("discount") rate to firms that are in danger of having to make layoffs.

Question

Quizplus · Accepted Answer

Buying and selling government bonds are called "open market operations" and are one of the Fed's most important tools.

Which of the Following Is a Tool of the Federal