Open Market Operations Occur When the Fed

question 164

Multiple Choice

Open market operations occur when the Fed:

• A) changes the discount rate on lending to banks.
• B) changes the rate of interest paid on reserves.
• C) buys and sells government bonds.
• D) sets up the Term Auction Facility.

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Definitions:

Governmental Entities

Organizations or bodies that are part of the governmental structure, including agencies, departments, and certain public enterprises, responsible for implementing and enforcing laws.

Liquidation Proceeding

A legal process through which a business closes its operations and sells its assets to pay creditors.

Trustee

A person or organization that holds and manages assets on behalf of others, under a legal agreement.

Distribution

The process of giving out products or goods to the final consumer or distributor.