During the holiday season in December, people use more currency than usual.To offset this increase in demand for money, the Fed increases the money supply through

Question

Quizplus · Accepted Answer

Defensive open-market operations are used by the Federal Reserve to offset temporary fluctuations in the demand for money, such as the increased demand for currency during the holiday season in December. These operations help to maintain short-term interest rates close to the target set by the Fed.

During the Holiday Season in December, People Use More Currency