The Fed Accidentally Discovered Open Market Operations When

question 1

Multiple Choice

The Fed accidentally discovered open market operations when

• A)it came to the rescue of failing banks in the early 1930s,and found that its purchases of bank loans injected reserves into the banking system.
• B)it purchased securities for income following the 1920-1921 recession.
• C)it attempted to slow inflation in 1919 by selling securities and found that its sales drained reserves from the banking system.
• D)it reinterpreted a key provision of the Federal Reserve Act.

---

Definitions:

Overweight

Being overweight is having a body weight above the standard weight range for one's height, which can lead to health problems.

BMI

Body Mass Index (BMI) is a measure that uses height and weight to estimate a person's body fat.

Selective Optimization

A strategy of focusing on and optimizing resources on selected areas while letting go or reducing investment in others.

Compensation

Payment or remuneration provided for services rendered or as reparation for injury or loss.