Answer:
sales; increase
Explanation:
Contractionary monetary policies are the actions of the Federal Reserve that aim at regulating or controlling inflation. They are policies that reduce the money supply in the economy. Open market sales involve the federal reserve selling treasury bills and bond to the banks and other financial institutions.
Banks are required to use customer deposits to purchase treasury bills. The result is that the amount of money available to be loaned out to firms and households declines. The act of Federal Reserves selling the treasury bills mops out excess liquidity in the market. Because there are limited funds available for credit, interest rate rise as demand for loans outweighs supply.
