________,the Fed's sale and purchase of securities,are particularly effective because they act quickly and predictably on the money supply.

Question

Quizplus · Accepted Answer

Open-market operations refer to the buying and selling of securities, which is a tool the Fed uses to influence the money supply. This method is particularly effective as it can be implemented quickly and predictably, allowing the Fed to respond quickly to changes in the economy. Discount rate controls and reserve requirements also impact the money supply, but to a lesser extent and with a lag time. Selective credit controls are not typically used by the Fed.

________,The Fed's Sale and Purchase of Securities,are Particularly Effective Because