Which of the following is the Federal Reserve's most important tool of monetary control?

Question

Quizplus · Accepted Answer

Open market operations refer to the buying and selling of government securities by the Federal Reserve in the open market. By buying securities, the Fed increases the amount of reserves held by banks, which in turn increases lending and money supply. By selling securities, the Fed decreases reserves and slows down lending and money supply. This is the Fed's most important tool of monetary control because it allows them to directly influence the money supply in the economy.

Which of the Following Is the Federal Reserve's Most Important