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shutvik [7]
4 years ago
13

Open market operations are when the federal reserve buys

Social Studies
1 answer:
Alchen [17]4 years ago
6 0

Answer: Open market operations are when the Federal Reserve buys and sells government securities in the open market in order to increase the amount of money in the banking system.

Explanation:

Open market operations (OMOs) refers to and selling of government securities in the open market by the Central Banks or Federal Reserve for the purpose of enlarging or contracting amount of money in the banking system. This technique is used in modifying and manipulating the federal funds rate that is the rate at which banks borrow reserves from another bank.

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