Which of the Following Is an Advantage of Open Market

question 61

Multiple Choice

Which of the following is an advantage of open market operations over other Federal Reserve policy tools?

• A) Use of the other tools must be approved by the President.
• B) Use of the other tools must be approved by Congress.
• C) Open market operations are more precise.
• D) Open market operations do not change interest rates.
• E) The U.S.Treasury and the Fed work together to undertake open market operations.

---

Definitions:

Treasury Stock

Treasury stock refers to shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Reissuance

The process of re-releasing previously issued shares back into the market, often after they've been bought back by the company.

Treasury Stock

Shares that were once issued and outstanding but were later bought back by the company, reducing the amount of outstanding stock on the open market.

Cash Dividend

A payout from a corporation's profits, determined by its board of directors, provided to a specific group of its stockholders as cash.