Open market operations:
A)are used infrequently
B)are a prime source of income for the U.S.economy
C)are used by the Fed to alter bank reserves
D)none of the above

Question

Quizplus · Accepted Answer

Open market operations refer to the purchase and sale of government securities by the Federal Reserve in order to influence the amount of reserves in the banking system. They are a commonly used tool by the Fed to alter bank reserves and therefore affect interest rates and the overall economy. They are not a prime source of income for the U.S. economy and are used regularly, not infrequently.

Open Market Operations