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When the Federal Reserve Raises the Target Federal Funds Rate

Question 99

Multiple Choice

When the Federal Reserve raises the target Federal funds rate, it:


A) Sells government securities to increase the excess reserves available for overnight loan
B) Buys government securities to increase the excess reserves available for overnight loan
C) Sells government securities to decrease the excess reserves available for overnight loan
D) Buys government securities to decrease the excess reserves available for overnight loan

Correct Answer:

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