The Fed's temporary operations involve the use of:

Question

Quizplus · Accepted Answer

The use of repurchase agreements is a temporary operation used by the Fed to inject liquidity into the banking system. In a repurchase agreement, the Fed purchases government securities from a bank with an agreement to sell them back at a later date. This provides the bank with short-term cash, which can help it meet its reserve requirements and continue making loans. Once the repurchase agreement expires, the bank buys back the securities from the Fed and returns the cash, completing the temporary operation.

The Fed's Temporary Operations Involve the Use Of