Federal Reserve open market operations directly influence
A) consumers.
B) Congress.
C) firms.
D) banks.

Question

Quizplus · Accepted Answer

Open market operations involve the buying and selling of government securities by the Federal Reserve with the aim of managing the money supply in the economy. This directly affects banks as it influences the amount of reserves they hold and the interest rates they charge for lending. It can indirectly influence consumers and firms as changes in interest rates can affect borrowing and spending behavior. However, the immediate and direct impact is on banks. Therefore, the best choice is D.

Federal Reserve Open Market Operations Directly Influence