Which of the Following Is Not a Tool Used by the Fed

question 124

Multiple Choice

Which of the following is not a tool used by the Fed to control the money supply?

• A) the reserve requirement
• B) the fed funds rate
• C) open market operations
• D) the discount rate

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Definitions:

Revenue-Maximizing

The strategy of setting prices and production levels to achieve the highest possible revenue, not necessarily leading to the highest profit.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, opposite to normal goods.

Income Elasticity

A measure of how much the quantity demanded of a good responds to a change in consumers' income, holding all other factors constant.

Expenditures Decline

A situation where there is a reduction in spending by individuals, businesses, or governments.