During a period of inflation, the Fed is likely to:
A. sell government securities to banks in order to reduce the amount of loanable funds.
B. buy government securities from banks in order to reduce the amount of loanable funds.
C. cut the discount rate to increase the affordability of loanable funds.
D. cut the required reserve ratio in order to reduce the amount of excess reserves banks have to loan out.
Answer: A
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