If the interest rate is above the Fed's target,the Fed should
A)buy bonds to increase bank reserves.
B)buy bonds to decrease bank reserves.
C)sell bonds to increase bank reserves.
D)sell bonds to decrease bank reserves.

Question

Quizplus · Accepted Answer

When the interest rate is above the Fed's target, the Fed should buy bonds to increase bank reserves. This will lower the interest rate and bring it closer to the Fed's target.

If the Interest Rate Is Above the Fed's Target,the Fed