Federal Reserve open market operations

Question

Quizplus · Accepted Answer

Federal Reserve open market operations involve buying and selling of bonds to affect bank reserves. This is done to control the money supply in the economy and influence interest rates. It is a tool used solely by the Federal Reserve and is not shared with the U.S. Treasury. The operations are not usually conducted simultaneously, as they are based on economic conditions and the Fed's policy objectives. They are also not designed to improve the federal deficit, which is the difference between government revenues and expenditures.

Federal Reserve Open Market Operations