When the Fed fears inflation, the Fed _{--------------------} government securities, so that the federal funds rate_{--------------------} and the quantity of money _{--------------------}. A)sells; falls; increases B)sells; rises; decreases C)buys; rises; decreases D)sells; falls; decreases E)buys; falls; increases

Question

Quizplus · Accepted Answer

When the Fed fears inflation, it sells government securities, which reduces the money supply, causing the federal funds rate to rise and the quantity of money to decrease.

When the Fed Fears Inflation, the Fed -------------------- Government Securities

When the Fed Fears Inflation, the Fed _{--------------------} Government Securities