Repurchase agreements by the Fed:
A) are used primarily to ease inflationary pressure.
B) were temporarily implemented during the financial crisis as a way for the Fed to consolidate failing banks.
C) are a contractionary form of open market operations.
D) are an expansionary form of open market operations.

Question

Quizplus · Accepted Answer

Repurchase agreements (repos) are used by the Federal Reserve as an expansionary form of open market operations to increase the money supply by purchasing securities with an agreement to sell them back in the short term.

Repurchase Agreements by the Fed