If the Fed wants to lower the interest rate,it will

Question

Quizplus · Accepted Answer

When the Fed wants to lower interest rates, it will typically buy bonds in the open market. This increases the money supply in the economy, which in turn decreases the interest rate. This is because when there is more money available in the economy, borrowers can access a larger pool of funds, driving down the cost of borrowing (i.e. the interest rate). Therefore, choice B (buy bonds and increase the money supply) is the best option for the Fed to lower interest rates.

If the Fed Wants to Lower the Interest Rate,it Will