If the Fed is selling government securities, you would expect
a. the money stock to increase.
b. the money stock to decline.
c. no effect on the money stock.
d. no effect on the federal funds rate.
Answer: B
If the Fed is selling government securities, you would expect
a. the money stock to increase.
b. the money stock to decline.
c. no effect on the money stock.
d. no effect on the federal funds rate.