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Open-market operations consist of the buying and selling of government short term treasuries.

Why does the government sell treasuries?

Government trades it's treasuries in order to control money supply in the economy.

The more treasuries it sells, the more money is mops away from the economy, and vice versa.

What are example of government treasuries?

The various types of Government Securities are;

  • Treasury note: Securities with maturities up to 10 years more than treasury bills, with interest, paid every six months.

  • Treasury bonds: Interest is paid every six months on long-term investments up to 30 years.

  • Notes With Floating Rates (FRN): This is a newer type of government security that was only launched in 2014 are floating rate notes.

FRNs are only given out for terms of two years. Every three months (quarter) interest is paid, and the rate might change based on the federal discount rates applied to 13-week Treasury bills.

Learn more about Treasuries at;

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