Multiple Choice
If there are no changes in inflation expectations,a sale of government bonds by the Fed in the open market will cause ________.
A) both the federal funds rate and the long-term expected real interest rate to rise
B) both the federal funds rate and the long-term expected real interest rate to fall
C) the federal funds rate to rise and the long-term expected real interest rate to fall
D) the federal funds rate to fall and the long-term expected real interest rate to rise
Correct Answer:
Verified
Correct Answer:
Verified
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