If the Fed Simultaneously Raises the Discount Rate and the Reserve

question 165

Multiple Choice

If the Fed simultaneously raises the discount rate and the reserve requirement, the money supply will:

• A)contract.
• B)remain unchanged.
• C)expand.
• D)take on a value that cannot be determined from the information given.

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Definitions:

Undeclared Dividends

These are dividends that have been earned by shareholders but have not yet been officially announced by the company.

Cumulative

An adjective describing quantities or changes that are added together sequentially over time.

Corporate Capital Structure

Refers to the mix of different types of securities issued by a corporation to finance its operations, typically involving a combination of debt and equity.