If the Fed is concerned with lowering ________ it will make an open market ________ of government securities,which will ________ real GDP.
A) unemployment; sale; increase
B) inflation; purchase; decrease
C) inflation; sale; decrease
D) unemployment; sale; decrease

Question

Quizplus · Accepted Answer

When the Fed is concerned with lowering inflation, it will sell government securities in open market operations. This action reduces the money supply, increases interest rates, and decreases real GDP, helping to control inflation.

If the Fed Is Concerned with Lowering ________ It Will