When the Federal Reserve Decreases the Federal Funds Target Rate

Multiple Choice

When the Federal Reserve decreases the federal funds target rate, the lower rate is achieved through

A) sales of government bonds, which reduces interest rates and causes people to hold less money.
B) purchases of government bonds, which reduces interest rates and causes people to hold less money.
C) purchases of government bonds, which reduces interest rates and causes people to hold more money.
D) sales of government bonds, which reduces interest rates and causes people to hold more money.