The buying and selling of government securities by the Fed is known as:
a. open market operations.
b. federal bond operations.
c. treasury bond operations.
d. open bonds operations.
e. discount rate operations.
Question 2
When the Fed sells government securities, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public.
b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public.
c. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public.
d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
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