Indicate what the problem in the economy is, Inflation or Unemployment. Indicate how the Fed's actions will affect money supply and interest rates. In each box circle an up or down arrow to show the correct effect. Problem I or U Money Supply Interest Rates Federal Reserve Action A. Sold Treasury securities on the open market It B. Bought Treasury securities on the open market C. Raised the Discount Rate D. Lowered the Discount Rate E. Raised the Reserve Requirement F. Lowered the Reserve Requirement Indicate in the table below how the Fed could use each of the 3 monetary policy tools to pursue an expansionary and contractionary policy. Circle the correct solution. Monetary Policy Expansionary/Easy Policy Contractionary /Tight Policy A. Open market Operations Buy Sell Buy Sell B. Discount Rate Raise Lower Raise Lower C. Reserve Requirements Raise Lower Raise Lower