In Figure 15

question 142

Multiple Choice

In Figure 15.3,the Fed can change the equilibrium interest rate from 2 percent to 6 percent by doing all of the following except

• A)Selling bonds in the open market.
• B)Raising the discount rate.
• C)Raising the reserve requirement.
• D)Decreasing the federal funds rate.

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Definitions:

Medium of Exchange

An item that is widely accepted in exchange for goods and services, facilitating trade by eliminating the need for a coincidence of wants.

Federal Deposit Insurance Corporation

Insures bank deposits up to $100,000.

Automated Teller Machines

Electronic banking outlets that allow customers to complete basic transactions without the need for a branch representative or teller.

Takeovers

The acquisition of one company by another, in which the acquiring company obtains a controlling interest in the target company.