If the Fed wishes to reduce nominal interest rates, it must engage in an open market ____ of bonds that ____ t

Question

If the Fed wishes to reduce nominal interest rates, it must engage in an open market ____ of bonds that ____ the money supply.

A. sale; increases

B. sale; decreases

C. sale; does not change

D. purchase; increases

E. purchase; decreases

Answer 1

E

great question

Answer 2

D. purchase; increases