Multiple Choice
Suppose that the current federal funds rate is below the federal funds target rate.In order to raise the federal funds rate the Fed will ________________ securities on the open market which will ________________ the supply of reserves in the market for reserves,pushing the rate closer to the target rate.
A) sell; increase
B) purchase; increase
C) purchase; decrease
D) sell; decrease
Correct Answer:
Verified
Correct Answer:
Verified
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