If the Fed fears inflation, then the Fed
A) directs banks to lower the nominal interest rate.
B) directs banks to raise the nominal interest rate.
C) will sell government securities in the open market.
D) will buy government securities in the open market.
E) will increase the income tax rate on interest income.

Question

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The Answer of If the Fed fears inflation, then the Fed
A) directs banks to lower the nominal interest rate.
B) directs banks to raise the nominal interest rate.
C) will sell government securities in the open market.
D) will buy government securities in the open market.
E) will increase the income tax rate on interest income.

If the Fed Fears Inflation, Then the Fed