If the Federal Reserve Uses Open-Market Operations to Lower the Interest

question 100

Multiple Choice

If the Federal Reserve uses open-market operations to lower the interest rate on short-term U.S. government bonds, then, as a consequence, asset prices

• A) increase and the average expected rate of return on assets decreases.
• B) decrease and the average expected rate of return on assets increases.
• C) increase and the average expected rate of return on assets increases.
• D) decrease and the average expected rate of return on assets decreases.

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