Open-market operations relates to which of the following? changes in reserve requirements purchases and sales of us government securities loans to banks all of the above none of the above
Open-market operations relates to which of the following? changes in reserve requirements purchases and sales of us government securities loans to banks all of the above none of the above
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Open-market operations relates to which of the following?
changes in reserve requirements
purchases and sales of us government securities
loans to banks
all of the above
none of the above
Expert Solution
Step 1
Open-market operations(OMOs) refers to monetary tool where the Fed indulge in buying or selling of government(G) securities like bonds which causes shift in money supply(MS). The reserve-requirements is the minimum amount set by the Fed that must be held as reserves by the commercial bank.
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