What Kind of Fed Activity Is Likely to Be Evident

Multiple Choice

What kind of Fed activity is likely to be evident when a reserve drain is required, but the Fed does not want to signal a policy move toward restraint?

A) No Fed buying or selling is likely to occur.
B) The Fed is likely to engage in reverse repurchase agreements.
C) The Fed is likely to engage in system repurchase agreements.
D) The Fed is likely to engage in outright sales.