Which statement is the best example of the Federal Reserve employing open market operations?

Question

A) buying securities to put more money into the economy
B) decreasing the salaries of federal workers
C) decreasing the federal budget proposed by the president
D) buying more commercial banks

Answer 1

The best example of the Federal Reserve employing open market operations is:

A) buying securities to put more money into the economy.

Open market operations refer to the buying and selling of government securities in the open market by the Federal Reserve to control the money supply and influence interest rates.