What are open market operations? If the economy is experiencing a recession, what kind of open market operations should the Fed undertake?
What will be an ideal response?
When the Fed buys or sells government bonds from/to private banks in exchange of reserves held by those private banks at the Fed, it is referred to as an open market operation. When an economy is going through a recession, the Fed should buy government bonds from private banks to stimulate the economy.
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Unions tend to: a. shift labor from the union sector to the non-union sector of the economy. b. shift labor from the non-union sector to the union sector of the economy. c. decrease wages in the union sector
d. increase wages in the non-union sector.
If market supply increases, equilibrium price will:
A. fall, causing a movement along the demand curve. B. rise and demand will shift to the left. C. rise, causing a movement along the demand curve. D. fall and demand will shift to the right.