Chapter 15, Problem 23P

To determine

Concept introduction:

Open Market Operations: It refers to the buying and selling of government securities by the Federal Reserve from or to the banking system with a view to prevent the economy from overheating or slipping into a recession.

Federal Open Market Committee (FOMC): It is a twelve-member body of the Federal Reserve System that controls the supply of money in the U.S. economy through open market operations.