If the Economy Is in an Inflationary Boom, the Fed

Multiple Choice

If the economy is in an inflationary boom, the Fed would most likely

A) encourage banks to provide loans by buying government securities.
B) encourage banks to provide loans by raising the discount rate.
C) encourage banks to provide loans by selling government securities.
D) restrict bank lending by selling government securities.
E) restrict bank lending by lowering the federal funds rate.