Question

The Federal Reserve has been aggressively expanding the money supply by using repurchase agreements in its open market operations. Ignoring other factors, this is likely to result in:

Answer 1

Answer: decrease in interest rates and an increase in inflation

Step-by-step explanation:

From the question, we are informed that The Federal Reserve has been aggressively expanding the money supply by using repurchase agreements in its open market operations.

This will result in a reduction in the interest rate and since there's more money in circulation, it will bring about an increase in the prices of goods.