Defensive open-market transactions represent day-to-day activities of the Fed and include all of the following except:
A) Stabilizing the money and capital markets
B) Avoiding sharp changes in interest rates
C) Avoiding sharp changes in credit conditions
D) Fine-tuning adjustments to keep the financial system operating smoothly
E) Sustainable economic growth

Question

Quizplus · Accepted Answer

Defensive open-market transactions by the Federal Reserve are aimed at maintaining the current state of financial markets, not directly targeting sustainable economic growth. Sustainable economic growth is a broader economic goal that involves many factors beyond the day-to-day operations of the Fed.

Defensive Open-Market Transactions Represent Day-To-Day Activities of the Fed and Include