Suppose the Federal Funds Rate is currently at​ 7%. In the market for​ reserves, the demand curve intersects the supply curve in the downward sloping part of the supply curve. The​ Fed’s balance sheet has recently contracted markedly. Inflation is at​ 3% and the unemployment rate is at​ 4%. The Fed decides to abolish interest payments on reserves. What is a likely​ consequence? A. Employment will rise. Inflation will fall. B. In the​ future, the Federal Funds Rate is less volatile. C. The Federal Funds Rate will fall. D. Inflation will rise. Employment will fall. E. In the​ future, the Federal Funds Rate is more volatile. F. The Federal Funds Rate will rise.