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g If the Fed sells government​ securities, in the short run the nominal interest rate​ ________ and the real interest rate​ ________.

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Answer:

The answer is: If the Fed sells government​ securities, in the short run the nominal interest rate ​increases and the real interest rate​ also increases.

Step-by-step explanation:

In the open market operations tool, Fed can sell government securities, mostly bonds, to reduce the money supply by replacing outstanding cash in the market with securities. Consequently, in the short run, the nominal interest rate will increase. The real interest rate is the nominal rate minus the inflation rate. Also in the short run, when the general prices or inflation hasn't been affected by Fed's intervention, the real interest rate will increase too.

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