The Federal Reserve is:__________A) a primary purchaser of Treasury securities and an active participant in the secondary market for these issuesB) a primary purchaser of Treasury securities but not an active participant in the secondary market for these issuesC) not a primary purchaser of Treasury securities but an active participant in the secondary market for these securitiesD) not a primary purchaser of Treasury securities and not an active participant in the secondary market for these securities

The federal reserve is a government body that is tasked with controlling liquidity in the economy by use of various tools like interest rate and issuance of securities.

Treasury securities are a tool for controlling economic liquidity by mopping up excess cash.

The federal reserve is not a primary purchaser of treasury securities as it does not bid for shares it issues at weekly auctions. Primary traders are the ones that buy at weekly auctions.

However in the secondary market the federal reserve trades in treasury securities to control credit and liquidity.