If the Fed Decides to Sell T-Bills, It Increases the Supply

question 108

Multiple Choice

If the Fed decides to sell T-bills, it increases the supply of T-bills.How will this affect the price of T-bills and the interest rate?

• A)T-bill prices fall and interest rates fall.
• B)T-bill prices rise and interest rates rise.
• C)T-bill prices rise and interest rates fall.
• D)T-bill prices fall and interest rates rise.