Question

Open market operations are _____. the processes by which money enters into circulation the buying and selling of government securities to alter the supply of money reserves greater than the required amounts rates of interest banks charge on short-term loans to their best customers

Answer 1

Answer:

the processes by which money enters into circulation the buying and selling of government securities to alter the supply of money

Explanation:

Open market operations are one of the tools that the Fed uses to regulate the supply of money and credit in the economy. It entails buying or selling if securities in the market to either increase or decrease the amount of money in circulation. Open market operations can be used for either expansionary or contractionary policies.

Should the Fed observe that the economy is slowing down, it may result in buying securities and bonds from the banks.  The act of buying increases the cash available for in the banks. If the reserves are constant, it means banks will be holding excess cash.  Banks will resort to lending to firms and individuals, which increases the money supply in the market.

Answer 2

Answer:

the buying and selling of government securities to alter the supply of money

Explanation:

none needed...