If the Federal Reserve Unexpectedly Decides to Sell Bonds, Which

Multiple Choice

If the Federal Reserve unexpectedly decides to sell bonds, which of the following will most likely happen in the short run?

A) The demand for loanable funds will increase, which will exert upward pressure on the interest rate.
B) The supply of loanable funds will decrease, which will exert upward pressure on the interest rate.
C) The supply of loanable funds will increase, which will exert downward pressure on the interest rate.
D) The natural rate of unemployment will increase.