When bond traders for the Federal Reserve seek to increase interest rates, they ______ bonds, which shifts the ______ curve to the left.
A) buy; IS
B) buy; LM
C) sell; IS
D) sell; LM

Question

Quizplus · Accepted Answer

When bond traders for the Federal Reserve seek to increase interest rates, they sell bonds, which decreases the money supply and shifts the LM curve to the left, resulting in higher interest rates.

When Bond Traders for the Federal Reserve Seek to Increase