The major purpose of the Federal Reserve buying government securities in open market operations is to:

Question

Quizplus · Accepted Answer

The major purpose of the Federal Reserve buying government securities in open market operations is to allow banks to increase their lending. By buying government securities, the Federal Reserve injects money into the banking system, which in turn allows banks to increase their lending activities. This leads to an increase in the money supply, which can stimulate economic growth.

The Major Purpose of the Federal Reserve Buying Government Securities