Open-market operations are:
A) sales or purchases of government securities, by the Fed, to or from banks on the open market.
B) regulations that set the minimum fraction of deposits banks must hold in reserve.
C) operations that allow any bank to borrow reserves from the Fed at a special interest rate, called the discount rate.
D) the purchase and sale of financial instruments on the open market.

Question

Quizplus · Accepted Answer

Open-market operations refer to the buying or selling of government securities by the Federal Reserve to or from banks and other financial institutions in the open market. The aim of these operations is to control the money supply in the economy by increasing or decreasing bank reserves.

Open-Market Operations Are