Open market operations involve the Fed

Question

Quizplus · Accepted Answer

Open market operations involve the buying or selling of government bonds by the Fed to influence the money supply in the economy. This is a common tool used by central banks to control inflation and stabilize the economy. Buying government bonds injects money into the economy, while selling reduces the money supply. The Fed does not buy or sell shares of stock and borrowing money from a bank is not an open market operation.

Open Market Operations Involve the Fed