Which of the Following Is a Tool That Is Used

question 66

Multiple Choice

Which of the following is a tool that is used by the Fed to control the quantity of money?

• A) open market operations
• B) real interest rate
• C) excess reserves
• D) government expenditure multiplier

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Definitions:

Linear

A term used to describe something that forms a straight line or a process that proceeds in steps of equal increments.

Downward-Sloping

A term often used to describe a curve or line on a graph that decreases from left to right, indicating a negative relationship between two variables.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied responds infinitely at a particular price level.

Income Elasticity

A measure of how the demand for a good or service changes in response to changes in consumers' income.