An open market sale will A. Increase the bank reserves and money supply, and causes the federal funds rate to fall. B. Reduce the bank reserves and money supply, and causes the federal funds rate to raise. C. Increase the bank reserves and money supply, and causes the federal funds rate to raise. D. Reduce the bank reserves and money supply, and causes the federal funds rate to fall. QUESTION 17 If the Federal Reserve wants to curb the high inflation rate in the economy, it can use policy tools (for example, open market operations) to change the interest rates. Should the Fed increase or lower the federal fund rate or interest rate in order to fight inflation? A. Increase the Federal Funds Rate to curb inflation. B. Reduce the Federal Funds Rate to curb inflation