Assume the Fed funds rate is initially on target. The demand for reserves by commercial banks increases by $million 2. Households receive allowances from the government account held at the Federal Reserve for $million 7. Which of the following statements is correct? If the Federal Reserve wants to keep the Fed funds rate on target, it must ________ through its the open market operations $million _____ .

A. inject Fed funds; 2

B. withdraw Fed funds; 9

C. inject Fed funds; 9

D. withdraw Fed funds; 5

E. inject Fed funds; 7