In the context of open market operations, when inflation is a concern, the Fedsellssecurities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, _____.

A. credit becomes tighter
B. banks increase the number of loans they make
C. banks offer subprime mortgage loans
D. the inflationary pressures in the economy heat up


Answer: A

Business

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