Question

When the Fed wants to expand the money supply through open market operations, it:______

A. purchases government securities from member banks
B. sells government securities to the Treasury
C. ask other nations for financial aids
D. None of the above

Answer 1

A.

Step-by-step explanation:

When the Fed wants to expand the money supply through open market operations, it purchases government securities from member banks. They do this in order to control the amount of money that travels through the countries banking system so they can move along with the monetary policies that they have in place.