Open-market operations involve
A)clearing checks
B)lending money to member banks
C)accepting deposits from member banks
D)the Fed's purchase and sale of government securities
E)any monetary policy actions

Question

Quizplus · Accepted Answer

Open-market operations involve the Fed's purchase and sale of government securities to control the money supply and interest rates. This is one of the key tools used by the central bank to conduct monetary policy. Choices A, B, C, and E are not correct as they do not accurately describe open-market operations.

Open-Market Operations Involve