If the Fed conducted open market operations,what would the direct effect of this be?
A) Changing the quantity of reserves supplied
B) Changing the reserve requirement
C) Changing the interest rate paid on reserves
D) Any of the above

Question

Quizplus · Accepted Answer

Open market operations involve the buying or selling of government securities by the Federal Reserve in order to influence the quantity of reserves in the banking system. Therefore, the direct effect of this would be changing the quantity of reserves supplied. Changing the reserve requirement or the interest rate paid on reserves are separate tools that the Fed can use to influence the economy, but they are not the direct effect of conducting open market operations.

If the Fed Conducted Open Market Operations,what Would the Direct