You are Chair of the Federal Reserve Board. In your meeting with the Federal Open Market Committee, the committee unanimously votes to increase the money supply using open market operations (OMOs). During the press conference after the meeting, a reporter asks you to explain what OMOs are and how you will use them to increase the money supply. You reply that OMOs are the selling and buying of government securities. The money supply increases when selling occurs and contracts when buying occurs. OMOs work by changing the amount of excess reserves available in the banking system. Open market operations refer to manipulating the rate at which the Federal Reserve Ban