If the Fed carries out an open market operation and sells U.S. ...

[Arii_bell]

If the Fed carries out an open market operation and sells U.S. government securities, the federal funds rate ________ and the quantity of reserves ________.
 
  A) falls; decreases
  B) rises; increases
  C) rises; decreases
  D) rises; does not change
  E) falls; increases

Question 2

The crowding-out effect describes how a government budget ________ ________ the real interest rate and thereby ________ equilibrium investment.
 
  A) surplus; raises; decreases
  B) surplus; lowers; decreases
  C) deficit; lowers; decreases
  D) deficit; lowers; increases
  E) deficit; raises; decreases

[ebonylittles]

Answer to Question 1

C

Answer to Question 2

E

[Arii_bell]

TYSM

[kusterl]

Excellent