Question 29 1 point An open market operation involves 1 the

Question 29 (1 point) An open market operation involves 1) the government buying or selling its bonds. 2) the Federal Reserve changing the rate of interest it charges on loans to banks. 3) the government disclosing all information on the purchases it has made. 4) the Federal Reserve buying or selling government bonds. Save

Solution

ans....
correct option is D
Fed buys or sells government bonds
The Federal reserve which is the central bank of USA tries to controll the monetary circulation in the economy of country by buying or selling government bonds in the form of treasury bills, bonds or mortgaged backed securities from private banks which determines the interest rates depending on the market situation in order to controll inflation and deflation.