Open market operations occur when:
A) the Fed buys and sells government bonds.
B) the Fed loans money to banks and other financial institutions when no one else will.
C) banks become insolvent.
D) banks are illiquid.

Question

Quizplus · Accepted Answer

Open market operations refer to the buying and selling of government bonds by the Federal Reserve. This is a tool used to control the money supply and influence interest rates in the economy. Options B, C, and D are not accurate descriptions of open market operations.

Open Market Operations Occur When