Through open market operations,the Fed is able to influence

Question

Quizplus · Accepted Answer

Through open market operations, the Fed buys or sells government securities, which affects the supply of money in the economy. This, in turn, affects the interest rates, which influences portfolio decisions of individuals and institutions. Therefore, the Fed is able to influence portfolio decisions through open market operations. The Fed's actions may also indirectly impact the stock and bond markets as a result of changing interest rates. However, these are not the direct targets of open market operations. Automatic stabilizers refer to government policies that automatically adjust during economic downturns or upturns, and are not directly related to open market operations.

Through Open Market Operations,the Fed Is Able to Influence