If the Demand for Bank Loans Suddenly Declines, a Defensive

Multiple Choice

If the demand for bank loans suddenly declines, a defensive action on the part of the Fed to keep the federal funds rate constant would take the form of open market bond:

A) sales that would prevent the federal funds rate from increasing.
B) sales that would prevent the federal funds rate from decreasing.
C) purchases that would prevent the federal funds rate from increasing.
D) purchases that would prevent the federal funds rate from decreasing.