If the Fed wishes to lower interest rates,it should:
A) conduct an open market purchase.
B) conduct an open market sale.
C) raise the discount rate.
D) do nothing.

Question

Quizplus · Accepted Answer

Conducting an open market purchase involves the Fed buying securities from banks, which increases the money supply and puts downward pressure on interest rates. This is the most common method used by the Fed to lower interest rates.

If the Fed Wishes to Lower Interest Rates,it Should