Suppose that the Federal reserve is concerned about the effects of rising stock prices on the economy. What could it do?

Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter15: Monetary Policy
Section: Chapter Questions
Problem 12QP
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Suppose that the Federal reserve is concerned about the effects of rising stock prices on the economy. What could it do?

 

a. buy bond to raise the interest rate

 

b. buy bonds to lower the interest rate INCORRECT

 

c. sell bonds to raise the interest rate INCORRECT

 

d. sell bonds to lower the interest rate

 

I thought the answer was B. BUT My results tell me option B. is incorrect....

 

Another chegg question shows option C. as incorrect as well...

 

Please help?

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