You read an article in the paper that stated the Federal Reserve bank sold $500 million of government securities on Tuesday of last week.When the Fed did this they were controlling the money supply by using which of the following tools?
A)open market operations
B)risk
C)discount rate
D)reserve requirements ratio
E)unable to tell with the information provided

Question

Quizplus · Accepted Answer

The Federal Reserve's sale of $500 million of government securities represents an example of open market operations, which is one of the primary tools used by the Fed to control the money supply. By selling these securities, the Fed is effectively reducing the amount of money available in the economy and reducing the growth of the money supply.

You Read an Article in the Paper That Stated the Federal