Question

Open market operations:___________.

a. are used infrequently
b. are a prime source of income for the U.S. economy
c. are used by the Fed to alter bank reserves
d. are used by the Fed to issue securities

Answer 1

The answer is D.

Step-by-step explanation:

Open market operation is one of the moneytary tools used by The Fed in the United States and the Central banks in other countries to control the money supply in the economy.

In the tools, The Fed increase the money supply by buying bonds/securities from the country's commercial banks This act will inject money into the economy. And to reduce the money supply, The Fed sells bonds/securities to the commercial banks.

The other moneytary tools are reserve requirement and discount rates(Interest rate).