You just bought a big house and have plans to buy a bunch of furniture, top-notch appliances, and complete some extensive landscaping. The budget for these activities is significant, but you are in no hurry. You plan to retire in this house. As you are considering options, you read online that the Federal Reserve abruptly decided to sell a significant amount of government securities in the coming months. What is your most likely conclusion about this action?

Question

Imani Ashley

Social Studies

1 November, 20:48

You just bought a big house and have plans to buy a bunch of furniture, top-notch appliances, and complete some extensive landscaping. The budget for these activities is significant, but you are in no hurry. You plan to retire in this house. As you are considering options, you read online that the Federal Reserve abruptly decided to sell a significant amount of government securities in the coming months. What is your most likely conclusion about this action?

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Answers (1)

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Nayeli Evans · Answer 1

The conclusion is to buy now.

Explanation:

The reason is that inflation increaes in the future which is prominent as the country is issuing government securities to finance its operations will limit the supply of the money in the market. This limitation of money will increase the inflation in the country. So it is better to buy a product which is cheap today rather than buying a product with a higher price in future (Inflated Price).