If the Fed fears inflation it will undertake an open market of securities, the federal funds rate will and the long- term real interest rate will .

Question

Quizplus · Accepted Answer

When the Fed fears inflation, it will sell securities in open market operations to decrease the money supply, causing the federal funds rate to rise. This typically leads to an increase in long-term real interest rates as well.

If the Fed Fears Inflation It Will Undertake an Open