To provide more liquidity and guarantee the safety and soundness of the banking system during a stock market crash, the Federal Reserve should

Question

Quizplus · Accepted Answer

Buying securities on the open market is a monetary policy tool used by the Federal Reserve to inject liquidity into the banking system, which can help stabilize the financial system during a stock market crash. This action increases the reserves of the banks, allowing them to lend more.

To Provide More Liquidity and Guarantee the Safety and Soundness