If the fed carries out an open market operation and sells u.s. government securities, the federal funds rate rises, and the quantity of reserves decreases. Option E
Generally, One of the most important tools that the Federal Reserve employs in the process of putting monetary policy into action is known as open market operations, or OMOs for short.
These OMOs include the buying and selling of assets on the open market by the central bank. The Federal Open Market Committee is in charge of determining what the short-term goal for open market operations should be.
The Federal Reserve moves the federal funds rate and influences other interest rates via the use of open market activities. This is done in order to either speed up or slow down the economy.
The Federal Reserve may expand the money supply and decrease the fed funds rate by acquiring, in most cases, assets issued by the Treasury.
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If the Fed carries out an open market operation and buys U.S. government securities, the federal funds rate and the quantity of reserves
