How to find the effect of government securities on money supply - AP Macroeconomics

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Question

Which of the following are considered open-market activities?

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Answer

Selling Government Bonds would be considered open market activities. When the Federal Reserve wants to adjust interest rates, they conduct open market operations - which involves selling government bonds (which raises interest rates by decreasing the money supply) or buying government bonds (which lowers interest rates by increasing the money supply.)

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