When the Fed Increases the Federal Funds Rate

question 153

Multiple Choice

When the Fed increases the federal funds rate,

• A)all other interest rates are unaffected.
• B)money demand is unaffected.
• C)all other interest rates increase.
• D)all other interest rates decrease.
• E)money demand increases.

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Definitions:

Working Memory

The structure of memory that can hold a sensory stimulus for up to 30 seconds after the trace decays. Also called short-term memory.

Assimilation

The process of absorbing new information into one's existing cognitive schemas, or the integration of individuals into a different cultural or societal group.

Nonadaptive

Describes traits or behaviors that do not provide a survival or reproductive advantage in a given environment.

Cognitive Process

The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.