Question: n a scarce reserves framework, if there are no changes in inflation expectations, a purchase of government bonds by the Fed in the open market

n a scarce reserves framework, if there are no changes in inflation expectations, a purchase of government bonds by the Fed in the open market will cause ________.

Question 24 options:

the federal funds rate to fall and the long-run expected real interest rate to rise

both the federal funds rate and long-run expected real interest rate to rise

both the federal funds rate and long-run expected real interest rate to fall

the federal funds rate to rise and the long-run expected real interest rate to fall

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