The Federal Open Market Committee (FOMC):?

Question

A. Buys and sells U.S. government bonds

B. Buys and sells stocks

C. Buys and sells commodities

D. Buys and sells mortgages

Answer 1

A.

The Federal Open Market Committee (FOMC), a component of the Federal Reserve System, is charged under U.S. law with overseeing open market operations in the United States, and is the principal tool of US national monetary policy. (Open market operations are the buying and selling of government securities.)

Answer 2

A is the usually the procedure but during the recent crisis they purchased almost 400 billion in mortgage back  securities.

Answer 3

A,

Buying bonds increases the money supply.  Selling bonds decreased the money supply.