Imagine That the Federal Funds Rate Was Above the Level

question 210

Multiple Choice

Imagine that the Federal Funds rate was above the level the Federal Reserve had targeted.To move the rate back towards it's target the Federal Reserve could

• A)buy bonds.This buying would reduce reserves.
• B)buy bonds.This buying would increase reserves.
• C)sell bonds.This selling would reduce reserves.
• D)sell bonds.This selling would increase reserves.

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