Which of the following statements is true of open-market operations?

A) Open-market operations involve clearing checks.
B) Open-market operations involve lending money to member banks.
C) Open-market operations involve accepting deposits from member banks.
D) Open-market operations involve the Fed's purchase and sale of government securities.
E) Open-market operations involve the Fed's purchase and sale of foreign exchange.

Open-Market Operations

Purchases and sales of government securities by the Fed in an effort to influence the money supply.

Government Securities

Government securities are financial instruments issued by a government to raise funds from investors, promising to pay back the borrowed amount with interest, including bonds, treasury bills, and notes.

Fed's Purchase

The buying of securities or assets by the Federal Reserve to inject money into the banking system and stimulate economic activity.