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→Open Market Operations
===Open Market Operations===
===Open Market Operations===
Open Market operations refer to the Federal reserve's buying and selling of U.S. Government Treasury securities (Treasury Notes and Bonds). By purchasing T-bills and bonds, the Fed purchases them with Federal Reserve Notes, or supplies more banking reserves to the network. By selling T-bills or bonds, the Fed drains excessive (or inflationary) banking reserves from the network. In this way the Fed attempts to control the money supply.
Open Market operations refer to the Federal reserve's buying and selling of U.S. Government Treasury securities (Treasury Notes and Bonds). By purchasing T-bills and bonds, the Fed purchases them with Federal Reserve Notes, or supplies more banking reserves to the network. By selling T-bills or bonds, the Fed drains excessive (or inflationary) banking reserves from the network. In this way the Fed attempts to control the money supply, the amount of money in circulation.
==Effects of the Fed's Monetary Policy==
==Effects of the Fed's Monetary Policy==