When the Central Bank Has Lowered or Raised Interest Rates

Multiple Choice

When the central bank has lowered or raised interest rates, this occurs only because the central bank's bond traders are:

A) Conducting open-market operations to ensure revenue is generated.
B) Conducting open-market operations to cover their positions.
C) Conducting open-market operations to ensure that the money supply is increased.
D) Conducting open-market operations to ensure that the equilibrium interest rate equals x percent.