When Did the Fed First Begin to Use Open Market

question 40

Multiple Choice

When did the Fed first begin to use open market operations as a policy tool?

• A) the 1920s
• B) the 1930s
• C) the 1960s
• D) the 1980s

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Definitions:

Principal

In finance, the original sum of money borrowed or invested, excluding any interest or dividends. In law, the primary party who authorizes another (the agent) to act on their behalf.

Installments

Payments divided over a period of time for a debt or purchase, rather than paying the total amount upfront.

Default

Failing to fulfill a legal obligation, such as not making a scheduled payment on a loan.

Negotiable Instrument

An official paper that promises the disbursement of a designated sum of money, which can be demanded at any time or paid at an agreed-upon moment, identifying the payer.