TeachMeFinance.com - explain open market operations
open market operations -- purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the Federal Open Market Committee, in order to influence the volume of money and credit in the economy. Purchases of government securities inject reserves into the depository system and foster expansion in money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and flexible monetary policy tool.
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