A . What is an open market operation? Who conducts them? b. What kind of open market operation would cause the money supply to contract? How does this work? When would the Fed be most likely to do this?
a . An open market operation is the buying and selling of government bonds by the Federal Open Market
Committee.
b. When the Fed sells government securities, it decreases banks' reserves, reducing credit availability, and
likely, reducing spending. The Fed would be most likely to sell government securities if the economy
is in an inflationary phase.
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In 2007, the value of the American dollar rose relative to the euro
a. True b. False Indicate whether the statement is true or false
Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen. One can conclude that
A) the demand for tarot card readers has increased. B) the law of demand has been violated. C) the number of tarot card readers has increased. D) tarot card readers are deliberately charging high prices because they provide services for superstitious clients.