Question

Open market operations generally involve A. the Fed buying and selling common stock in order to affect the liquidity of the stock market. B. the Fed making discount loans to depository institutions. C. the Fed buying and selling U.S. government securities. D. private investors buying and selling securities directly on​ exchanges, rather than through brokers.

Answer 1

C) the Fed buying and selling U.S. government securities.

Step-by-step explanation:

Open market operations consist exclusively of transactions that involve US government securities. The FED can decide to either sell or buy the securities, e.g. T-bonds. Private organizations (e.g. banks, mutual funds, etc.) are also involved since they are the once that ether buy the securities from the government or sell the securities to the government.