Question

The Fed manages the country's money in three main ways. Which practice is described below?

The government is able to regulate the amount of money available to banks for lending through the purchase and sale of government securities, such as savings bonds.

Answer 1

- through Purchase and sale of Government Securities ( which commonly known as open market policy)

- By controlling the discount rate

- By Changing the reserve requirements

Answer 2

Open Market Operations

Step-by-step explanation:

In open market operations, government controls the flow of money in their country. If government wants to decrease the flow of money then it provide authorized dealers with saving bonds which will be sold to general public. When public buy these bonds then flow of money is decreased in market.

If government wants to increase the flow of money then it buys back all bonds and securities hence increasing flow of money.