The two types of open market operations are
A)offensive and defensive.
B)dynamic and reactionary.
C)active and passive.
D)dynamic and defensive.

Question

Quizplus · Accepted Answer

The two types of open market operations are dynamic and defensive. Dynamic open market operations are proactive and are aimed at achieving the Fed's long-term objectives such as price stability, while defensive open market operations are reactive and are aimed at stabilizing short-term fluctuations in the economy. Therefore, option D, which includes defensive open market operations, is the correct answer.

The Two Types of Open Market Operations Are