Question

Which of the following is not the policy tool targeted by open market operations?Select the correct answer below:the reserve requirementthe mortgage ratethe discount rateall of the above are not tools of open market operations

Answer 1

Based on the macroeconomic theory, and the available options, all the options in this question are not tools of open market operations.

What is Open Market Operations

Open Market Operations is a term that is used to describe the purchase and sale of securities in the open market by the Federal Reserve.

Usually, Open Market Operations are conducted to control the supply of money that is on reserve in the country's banks.

For example, The Fed purchases Treasury securities, the purpose is to increase the money supply, and when it sells these securities, the purpose is to reduce the money supply in the economy.

Therefore, the policy tool targeted by open market operations includes the following:

• Expansionary Monetary Policy
• Contractionary Monetary Policy

There are also different forms of Open Market Operations which include the following:

1. Temporary Open Market Operations
2. Permanent Open Market Operations

Hence, in this case, it is concluded that the correct answer is option D "all of the above are not tools of open market operations."

Learn more about Open Market Operations here: https://brainly.com/question/14256204

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