Open-Market Operations Is the Buying and Selling of Government Securities

question 216

True/False

Open-market operations is the buying and selling of government securities by the Federal Reserve Board.

---

Definitions:

Consumer Surplus

The difference between the maximum price a consumer is (or consumers are) willing to pay for an additional unit of a product and its market price; the triangular area below the demand curve and above the market price.

Willing To Pay

The maximum amount an individual is prepared to spend to purchase a good or service or to avoid something undesirable.

Moral Hazard

A situation in economics where one party is willing to take risks because the costs that could result will not be borne by that party.

Behavior Alteration

The modification or change in individual or group behaviors, often initiated by interventions or environmental modifications.