The Trading Desk is sometimes directed to ____ a sufficient amount of Treasury securities that will ____ the federal funds rate to a new targeted level set by the FOMC.
A)buy; decrease
B)sell; increase
C)buy; increase
D)sell; decrease
E)A and B

Question

Quizplus · Accepted Answer

The Trading Desk buys Treasury securities to increase the money supply, which decreases the federal funds rate (A). It sells Treasury securities to decrease the money supply, which increases the federal funds rate (B).

The Trading Desk Is Sometimes Directed to ____ a Sufficient