__1__ is a tool of monetary policy in which the federal reserve buys and sells __2__ 1) a) investing b) open market operation c) trading 2) a) debentures b) gold c) government securities

Open Market Operation is a tool of monetary policy in which the Federal Reserve buys and sells government securities. It is the major tool the Fed uses to affect the supply of reserves in the banking system. The market is open, which means that the Fed doesn’t decide on its own which securities dealers it will do business with.