If the Fed Wanted to Act to Increase Borrowing by Firms

question 55

Multiple Choice

If the Fed wanted to act to increase borrowing by firms and consumers and thus hopefully reduce unemployment,it would

• A)sell securities.
• B)raise the reserve rate.
• C)decrease the interest rate on loans to member banks.
• D)increase the interest rate on loans to member banks.
• E)encourage people to save more and spend less.

---

Definitions:

Lithium

A chemical element used in batteries and as a treatment for bipolar disorder.

Bipolar Disorder

A condition of mental health defined by significant variations in emotional state, encompassing highs (mania or hypomania) and lows (depression).

Schizophrenia

A severe mental disorder characterized by distortions in thinking, perception, emotions, language, sense of self, and behavior.

Hallucinations

Perceptions in the absence of external stimuli, such as seeing or hearing things that aren't there.