The chairman of the federal reserve board can accelerate economic activity by lowering interest rates. what primary method does the federal reserve use to accomplish this?

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05-12-2017
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The chairman of the federal reserve board can accelerate economic activity by lowering interest rates. what primary method does the federal reserve use to accomplish this?

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meerkat18 meerkat18 · Answer 1 · 2017-12-17T10:40:01+01:00

The answer is Open market operations (OMO). The main purpose of open market operations is— to take hold of the short-term interest rate and the supply of base money in an economy. other from supplying commercial banks with liquidity and sometimes getting a surplus liquidity from commercial banks—Open market operations (OMO) meaning the buying and selling of government securities in the open market in order to prolong or contract the amount of money in the banking system.