Question

An open market operation is​ ____________.
a. an exchange between a private bank and the federal reserve where the fed buys or sells government bonds to private banks.
b. where a bank borrows reserves or bonds from the federal​ reserve's discount window.
c. an exchange between private banks where the banks buy or sell bonds to each other.
d. the process of selling​ fed-issued ious between banks.

Answer 1

A feds sell to private banks

Answer 2

Answer:

The Correct Answer is A.

Explanation:

• An open market operation is referred to the process of selling and buying of the government securities in the open market to expand and contract the amount of money in the Market or Economy.
• An open market operation tends to soften the Interest rates.
• It allow corporate to borrow at favorable interest rates.