If the Fed carries out an open market operation and sells U.S. government securities, the federal funds rate _{--------------------}and the quantity of reserves_{--------------------} . A)falls; increases B)rises; decreases C)rises; does not change D)rises; increases E)falls; decreases

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When the Fed sells U.S. government securities, it decreases the reserves in the banking system, leading to a higher federal funds rate as banks have fewer reserves to lend to each other.

If the Fed Carries Out an Open Market Operation and Sells