Question

Suppose the Federal Reserve System sells $10 billion in T-bills as part of a change in...

Suppose the Federal Reserve System sells $10 billion in T-bills as part of a change in monetary policy. This action will most likely do which of the following in the short run:

a.

Increase the money supply, increase interest rates, decrease aggregate demand, and decrease real GDP.
b.

Increase the money supply, decrease interest rates, increase aggregate demand, and increase real GDP.
c.

Decrease the money supply, increase interest rates, decrease aggregate demand, and decrease real GDP.
d.

Decrease the money supply, decrease interest rates, increase aggregate demand, and increase real GDP.
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