purchase; right
Answer: Option C.
Explanation:
When the economy is operating in an open market and there is purchase of the reserves, the supply curve will shift towards the right which means that the supply of the reserves in the market will increase.
With the increase in the supply of the reserves which is caused by shifting of the supply curve towards the right direction, the interest rate of the federal funds will shift downwards from the original position of the interest rate of the federal fund.
