If the Fed engages in open market sales in direct response to an increase in the rate of inflation, this is known as

Question

Quizplus · Accepted Answer

Open market sales in direct response to an increase in the rate of inflation would indicate that the Fed is actively engaging in policymaking to address inflation. Direct policymaking is not a commonly used term, and passive policymaking would imply that the Fed is not taking any action. Fiscal policymaking involves government taxation and spending, which is not related to open market sales.

If the Fed Engages in Open Market Sales in Direct