Considering open market operations, which of the following observations is incorrect?
A)it can be implemented quickly and cheaply.
B)it can be done quietly without a lot of political debate
C)it is potentially the most powerful tool to control the supply of money.
D)it is the most important method now used to control the supply of money.

Question

Considering open market operations, which of the following observations is incorrect?
A)​it can be implemented quickly and cheaply.
B)​it can be done quietly without a lot of political debate
C)​it is potentially the most powerful tool to control the supply of money.
D)​it is the most important method now used to control the supply of money.

Quizplus · Accepted Answer

Open market operations are indeed a powerful tool for controlling the money supply, but stating it as "potentially the most powerful" could be misleading or incorrect because the power of open market operations can vary depending on the context and compared to other monetary policy tools like setting reserve requirements or adjusting the discount rate.

Considering Open Market Operations, Which of the Following Observations Is