An Example of a Tool Used by the Fed That

question 41

Multiple Choice

An example of a tool used by the Fed that decreases the money supply is:

• A) a decrease in the prime lending rate.
• B) an increase in the required reserve ratio.
• C) the Fed buying government bonds in the open market.
• D) a decrease in the discount rate.

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Definitions:

TRIN Ratio

A technical analysis indicator that compares advancing and declining stock issues and volume to assess market sentiment.

Market Breadth

An indicator used to gauge the direction of the overall stock market by analyzing the number of companies advancing versus those declining.

50-day Moving Average

A technical analysis indicator that represents the average closing price of a security over the most recent 50-day period, used to gauge short-term price trends.

Healthcare Index

A stock market index that measures the performance of the healthcare sector, including pharmaceuticals, hospitals, medical technology companies, etc.