Want this question answered?
they allow the Fed to change the nation's money supply to its most ideal level
factors which determine money supply is: open market operations, variable money supply bank rate policy.
Because that is how FED removes money from circulation, thus reducing money supply. The opposite would be buying securities in open market operations in order to increase money supply.
The Federal Reserve can change the money supply with 1) open market operations, 2)making changes in the reserve ratio, and 3) making changes in the discount rate. Of the three policies the open market is the most common.
-open-market operations (purchase or sale of government securities) -change the discount rate -change reserve requirements
interest rates
they allow the Fed to change the nation's money supply to its most ideal level
they allow the Fed to change the nation's money supply to its most ideal level
factors which determine money supply is: open market operations, variable money supply bank rate policy.
Because that is how FED removes money from circulation, thus reducing money supply. The opposite would be buying securities in open market operations in order to increase money supply.
The Federal Reserve can change the money supply with 1) open market operations, 2)making changes in the reserve ratio, and 3) making changes in the discount rate. Of the three policies the open market is the most common.
-open-market operations (purchase or sale of government securities) -change the discount rate -change reserve requirements
An open market policy can be used to stimulate the economic activity by increasing the money supply, lowering the interest rates and the change in reserve banks.
Open Market operations are the buying and selling of goverment securities ,so they may alter the supply of money. These are often used as a monetary policy tool.
open market operations
Open market operations is the best instrument for controlling week-to-week changes in the money supply.
Open market operations is the most used instrument for controlling changes in the money supply.