The Primary Tools That the Federal Reserve Uses to Influence

question 3

Multiple Choice

The primary tools that the Federal Reserve uses to influence demand are

• A)changes in taxes.
• B)changes in government purchases.
• C)changes in financial regulations.
• D)changes in interest rates.
• E)changes in stock prices.

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Definitions:

Underestimating

The act of judging something to be less in quantity or importance than it actually is.

Accountable

Being responsible for one's actions and being able to explain or justify them.

Deindividuation

A psychological state where an individual loses self-awareness and self-restraint, often occurring in group settings that foster anonymity.

Social Loafing

This concerns the tendency of people to lower their effort in goal pursuit when in a collective setting as opposed to on an individual basis.