Open market operations generally involve A. the Fed buying and selling common stock in order to affect the liquidity of the stock market. B. the Fed making discount loans to depository institutions. C. the Fed buying and selling U. S. government securities. D. private investors buying and selling securities directly on exchanges, rather than through brokers.

Question

Jakayla Mcneil

Business

10 October, 08:41

Open market operations generally involve A. the Fed buying and selling common stock in order to affect the liquidity of the stock market. B. the Fed making discount loans to depository institutions. C. the Fed buying and selling U. S. government securities. D. private investors buying and selling securities directly on exchanges, rather than through brokers.

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Answers (1)

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Cassius Ho · Answer 1

C) the Fed buying and selling U. S. government securities.

Explanation:

Open market operations consist exclusively of transactions that involve US government securities. The FED can decide to either sell or buy the securities, e. g. T-bonds. Private organizations (e. g. banks, mutual funds, etc.) are also involved since they are the once that ether buy the securities from the government or sell the securities to the government.