The primary tool the Fed uses to control the money supply today is:

Question

Quizplus · Accepted Answer

Open market operations involve the buying and selling of government securities by the Fed in order to influence the money supply. By buying securities from banks, the Fed injects money into the economy and increases the money supply. By selling securities, the Fed withdraws money from circulation, decreasing the money supply. This tool is used by the Fed to implement monetary policy and control inflation.

The Primary Tool the Fed Uses to Control the Money