Just Prior to the Year 2000, the Fed Was Concerned

Multiple Choice

Just prior to the year 2000, the Fed was concerned that people would make larger than normal bank withdrawals out of fear of what was called the "Y2K computer bug." Fearing that this would disrupt the banking system, the Fed wanted to use a defensive action to prevent any such disruption. This 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.