ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Federal Reserve buys and sells government securities to control the money supply and interest rates. This activity is called open market operations.

Detailed explanation-2: -The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.

Detailed explanation-3: -When the Fed buys securities on the open market, cash is transferred to these banks, increasing the nation’s money supply. Conversely, when the Fed sells government securities, these banks have less cash available to them – a decrease in the nation’s money supply.

Detailed explanation-4: -The Fed provides the country with a safe, flexible, and stable monetary and financial system. The Fed’s main duties include conducting national monetary policy, supervising and regulating banks, maintaining financial stability, and providing banking services.

Detailed explanation-5: -Which of the following is responsible for decision making regarding the purchase and sale of bonds by the Fed? The Federal Open Market Operations Committee.