Which of the following BEST describes what is called the "open-market operations" of the Federal Reserve System?
A) The development of new financial opportunities for banks
B) The minting of new money to disperse into the money market
C) The control of interest rates among banks
D) The maintenance of a well-functioning lending system among banks
E) The buying and selling of securities by the Fed

Question

Quizplus · Accepted Answer

Open-market operations refer to the buying and selling of government securities by the Federal Reserve in order to influence the money supply and interest rates in the economy. By purchasing securities from banks, the Fed increases the money supply, which can lower interest rates and stimulate economic activity. Selling securities has the opposite effect, reducing the money supply and raising interest rates.

Which of the Following BEST Describes What Is Called the "Open-Market