Question

In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, ____________.

Answer 1

The correct answer is credit becomes tighter.

Step-by-step explanation:

The Fed, the Federal Reserve System, is the central banking system of the United States whose objectives, according to the Fed's documentation, are to make the country's monetary policy decisions, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to deposit institutions, the United States government and official foreign institutions.