Choose the best response for each of the following statements. a. When the Federal Reserve makes an open market purchase, the Fed:
sells bonds to the public, which decreases the money supply.
buys bonds from the public, which decreases the money supply.
sells bonds to the public, which increases the money supply.
buys bonds from the public, which increases the money supply.
b. If the Fed wants to increase interest rates, it should make an
(Click to select)
open market sale
open market purchase
This would
(Click to select)
increase
decrease
the money supply and achieve the increase in interest rates