Open-market operations are:
A) Commerce Department efforts to open foreign markets to international trade.
B) Federal Reserve purchases and sales of government bonds.
C) Securities and Exchange Commission rules requiring open disclosure of market trades.
D) Treasury Department purchases and sales of the U.S. gold stock.

Question

Quizplus · Accepted Answer

Open-market operations refer to the buying and selling of government bonds by the Federal Reserve with the aim of influencing the money supply and interest rates in the economy. This tool is used to carry out monetary policy and achieve the desired macroeconomic objectives such as price stability and full employment. Options A, C, and D are not correct definitions of open-market operations.

Open-Market Operations Are