An open market operation is the federal Reserve's purchase or sale of
A) corporate bonds.
B) Treasury reserves.
C) excess reserves.
D) Treasury securities.

Question

Quizplus · Accepted Answer

An open market operation is the federal reserve's purchase or sale of Treasury securities. This is a common tool used by the Federal Reserve to manage the money supply in the banking system. By buying or selling Treasury securities, the Federal Reserve can influence the amount of money in the economy and the interest rates that banks charge each other for overnight loans.

An Open Market Operation Is the Federal Reserve's Purchase or Sale