The correct choice of answer is Option B which is buy, LM
When bond traders for the Federal Reserve seek to decrease interest rates, they buy bonds, which shifts the LM curve to the right.
What are Bonds and LM curve?
- A bond is simply a loan taken out by a company. Instead of going to a bank, the company gets the money from investors who buy its bonds. In exchange for the capital, the company pays an interest coupon, which is the annual interest rate paid on a bond expressed as a percentage of the face value.
- LM (liquidity-money) curve - The LM curve shows the combinations of interest rates and levels of real income for which the money market is in equilibrium. It shows where money demand equals money supply. For the LM curve, the independent variable is income and the dependent variable is the interest rate.
To learn more about bonds and LM curve, click the links.
https://brainly.com/question/24033694
https://brainly.com/question/13474237
#SPJ4
