If the Fed wants to increase the federal funds rate through open market operations, it will ________.

A)buy bonds

B)decrease the interest rate paid on borrowed reserves held at the Fed

C)increase the quantity of required reserves

D)sell bonds

If the federal funds rate is set by the Taylor rule and the inflation rate increases by 3 percentage points, everything else remaining unchanged, the federal funds rate for a given inflation target should

A) increase by 4.5 percentage points

B) decrease by 1.5 percentage points

C) increase by 3 percentage points

D) decrease by 3 percentage points