Open Market Operations

http://www.investopedia.com/ask/answers/06/openmarketoperations.asp
This article about open market operations is such a great connection to what we've learned in class. It goes into depth about each of the two open market operations, and clearly shows the connection between changes in aspects of the economy, like money supply, interest rates, investment, and inflation, due to the effects of these policies. Just like we discussed in class, the article pointed out that the Federal Reserve System (specifically the Federal Open Market Committee) is responsible for the control of money supply and, therefore, inflation, by putting these policies into action. The article distinguished between buying securities to increase the money supply (expansionary) and selling securities to decrease the money supply (contractionary) and even mentioned that the securities used in open market operations are Treasury bills, bonds, and notes, just as we learned. Something the article really helped my understanding of was the effect the policies have on the amount of lending money banks have. We had already covered that concept this chapter, but reading this article even furthered my comprehension of the topic. In my opinion, articles like this one are really useful studying tools because they reiterate the material we've learned in class and from reading the chapters in our textbooks, and sometimes they present ideas in ways that might be easier for us to understand. Plus, repetition of the concepts can never hurt.