Multiple Choice
By using open market operations, the Federal Reserve
A) adjusts the supply of reserves to keep the federal funds interest rate equal to its target.
B) adjusts the supply and demand of reserves to keep the federal funds interest rate equal to its target.
C) adjusts the demand of reserves to keep bank rates in line with the federal funds rate target.
D) controls banks' demand for reserves, thereby keeping the federal funds rate equal to its target.
E) None of the above answers is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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