Question

The Fed uses open market operations by buying and selling . The rate at which banks lend money and charge one another for storing money in the Fed is known as the . When the Fed carries out open market operations to lower the Federal Funds Rate, the money supply and available credit will likely .

Answer 1

Answer:

Treasury securities; Federal fund rate; increase

Explanation:

Open market operations are means of inducing or curbing money supply in the economy for controlling demand and supply of money in the economy. The Fed purchases treasury securities to curb money supply as a contractionary economic policy  and sells treasury securities as an expansionary economic policy.

Federal fund rate is the rate at which financial institutions lends excess reserves to other institutions. These reserves are held by the institutions with the Fed.

If fund rates are lowered by Fed, demand for money would increase as funds are available a a cheaper rate. So, money supply and available credit increases.

Answer 2

Answer: Securities, Federal Funds Rate, Increase

Explanation: Edge 2022