153757
AssignmentMultiple Choice

Monetary Policy: The Federal Reserve

Question 153757 • IL-Economics

Based on the information presented in the video, what is the main goal of buying and selling government securities?

Answer
A
to reduce the strength of US currency
B
to decrease the unemployment rate
C
to increase the inflation rate
D
to influence the Federal Funds Rate

Explanation

Buying and selling government securities are open-market operations used by the Federal Reserve to affect the amount of money banks have available to lend. These operations influence the Federal Funds Rate, the rate banks charge one another for overnight loans. Therefore, the main goal is to influence the Federal Funds Rate.

AI-written and checked against the verified answer.

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