What Kind of Fed Activity Is Likely to Be Evident

question 35

Multiple Choice

What kind of Fed activity is likely to be evident when a reserve drain is required, but the Fed does not want to signal a policy move toward restraint?

• A)No Fed buying or selling is likely to occur.
• B)The Fed is likely to engage in reverse repurchase agreements.
• C)The Fed is likely to engage in system repurchase agreements.
• D)The Fed is likely to engage in outright sales.

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