When Bond Traders for the Federal Reserve Seek to Increase

question 90

Multiple Choice

When bond traders for the Federal Reserve seek to increase interest rates, they ______ bonds, which shifts the ______ curve to the left.

• A) buy; IS
• B) buy; LM
• C) sell; IS
• D) sell; LM

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Definitions:

IRA

Individual Retirement Account; a financial tool in the United States for retirement savings with various tax advantages.

ETA

Estimated Time of Arrival; the predicted time when a vehicle, individual, or shipment is expected to reach a particular destination.

Al Qaeda

A militant Islamist organization founded by Osama bin Laden, responsible for several high-profile terrorist attacks.

Isolationist Policy

A foreign policy stance wherein a country minimizes its involvement in international affairs and focuses on its own development.