Multiple Choice
In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, _____.
A) credit becomes tighter
B) banks increase the number of loans they make
C) banks offer subprime mortgage loans
D) the inflationary pressures in the economy heat up
Correct Answer:
Verified
Correct Answer:
Verified
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