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If the Fed Decides to Sell T-Bills, It Increases the Supply

Question 108

Multiple Choice

If the Fed decides to sell T-bills, it increases the supply of T-bills.How will this affect the price of T-bills and the interest rate?


A) T-bill prices fall and interest rates fall.
B) T-bill prices rise and interest rates rise.
C) T-bill prices rise and interest rates fall.
D) T-bill prices fall and interest rates rise.

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