Choose the best word or phrase from each drop-down menu.

Question

The Fed uses open market operations by buying and selling
.

The rate at which banks lend money and charge one another for storing money in the Fed is known as the
.

When the Fed carries out open market operations to lower the Federal Funds Rate, the money supply and available credit will likely
.

Answer 1

The Fed uses open market operations by buying and selling government securities.

The rate at which banks lend money and charge one another for storing money in the Fed is known as the Federal Funds Rate.

When the Fed carries out open market operations to lower the Federal Funds Rate, the money supply and available credit will likely increase.