A Decision on the Part of the FOMC to Lower

question 4

Multiple Choice

A decision on the part of the FOMC to lower interest rates must necessarily be followed by

• A) Fed open market purchases, which lower the money supply and reduce interest rates.
• B) Fed open market purchases, which increase the money supply and reduce interest rates.
• C) Fed open market sales, which lower the money supply and reduce interest rates.
• D) Fed open market sales, which increase the money supply and reduce interest rates.
• E) Fed open market purchases, which increase the money supply and increase interest rates.

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