With Open Market Operations, the Fed buys or sells government debt (Treasury bills and bonds) in the open market. If the Fed buysa large amount of Treasury bills and bonds (They used to call this "Quantitative Easing", now it's "Large-Scale Asset Purchases", or just "Purchases"), what change would you expect in Interest Rates and in Inflation.

Part A: How would Interest Rates change?

Increase___ or Decrease___

Please explain whyand howthis change is happening.

Type your answer and explanation here:

Part B: How would Inflation change?

Increase___ or Decrease___

Please explain whyand howthis change is happening.

Type your answer and explanation here: