When the Federal Reserve purchased large quantities of government securities to release more money into the economy, the Fed was

Question

Quizplus · Accepted Answer

When the Federal Reserve purchases large quantities of government securities, it is engaging in open-market operations, which involve buying or selling government securities to add or remove money from the economy. This is one of the three main tools the Fed uses to implement monetary policy, along with changing the reserve requirement and adjusting the federal funds rate. The Fed does not have the power to adjust the effective tax rate or seize private assets using eminent domain.

When the Federal Reserve Purchased Large Quantities of Government Securities