One official tool the Fed might choose to use to stimulate the economy would be to purchase securities from member banks.

Question

Quizplus · Accepted Answer

This is true. The Fed can use open market operations (OMO) to purchase securities, such as Treasury bonds or mortgage-backed securities, from member banks in order to increase their reserves and encourage them to lend more. This can lead to increased economic activity and stimulate the economy.

One Official Tool the Fed Might Choose to Use to Stimulate