If the Federal Reserve buys or sells Treasury securities to affect the money supply,it uses
A)open market operations.
B)reserves at commercial banks.
C)discount rate adjustments.
D)federal funds adjustments.

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. These activities can impact the amount of cash reserves that banks hold, which in turn can affect the overall level of lending and economic activity. The discount rate and federal funds rate also play a role in monetary policy, but they are not directly related to the buying and selling of Treasury securities.

If the Federal Reserve Buys or Sells Treasury Securities to Affect