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Open market operations contain the shopping for and selling of U.S. authorities securities (federal agency and mortgage-backed). The time period ‘open market’ signifies that the Fed does not resolve on its own which securities dealers it should do enterprise with on a specific day. Fairly, the selection emerges from an ‘open market’ during which the various securities sellers that the Fed does business with‍—‌the major dealers‍—‌compete on the idea of price. Open market operations are versatile and thus, the most continuously used device of financial policy.

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