Prior to the Great Recession, open market operations were the main tool used by the Federal Reserve to influence the federal funds rate. When conducting open market operations, what could the Federal Reserve do to lower the federal funds rate?
O The Fed could buy bonds. This buying would reduce reserves.
O The Fed could buy bonds. This buying would increase reserves.
O The Fed could sell bonds. This selling would reduce reserves.
O The Fed could sell bonds. This selling would increase reserves.