Under Which of the Following Circumstances Would the Federal Reserve

question 57

Multiple Choice

Under which of the following circumstances would the Federal Reserve System want to decrease the money supply by increasing the discount rate?

• A) The economy is experiencing severe inflation, and market activity is very low. Yet the financial institutions have a great deal of M-1 resources at their disposal that they are not investing.
• B) The economy is experiencing severe inflation, and most financial institutions have low M-1 resources at their disposal. Yet there is a great deal of market activity.
• C) The economy is experiencing severe deflation, and market activity is very low. Yet the financial institutions have a great deal of M-1 resources at their disposal that they are not investing.
• D) The economy is experiencing severe deflation, and most financial institutions have low M-1 resources at their disposal. Yet there is a great deal of market activity.
• E) The economy is experiencing wild fluctuations, and most financial institutions have low M-1 resources at their disposal.

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Definitions:

Core ERP Modules

Fundamental components of an ERP system catering to critical business functions including finance, human resources, inventory management, and sales.

Financial

Relates to finance, encompassing the management, creation, and study of money, banking, credit, investments, assets, and liabilities.

HR

Human Resources; a department within organizations concerned with the management of people, including recruiting, training, and welfare.

TPSs

Transaction Processing Systems, which are software and hardware systems designed for processing business transactions efficiently and accurately.