The Fed Can Reduce the Federal Funds Rate by

question 54

Multiple Choice

The Fed can reduce the federal funds rate by

• A)decreasing the money supply. To decrease the money supply it could sell bonds.
• B)decreasing the money supply. To decrease the money supply it could buy bonds.
• C)increasing the money supply. To increase the money supply it could sell bonds.
• D)increasing the money supply. To increase the money supply it could buy bonds.

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Definitions:

Paid-In Capital

Funds contributed by investors through the purchase of stock directly from the company, representing ownership in the company.

Reissued

The process of issuing again or renewing, often used in the context of stocks, checks, or documents that are put back into circulation.

Cash Dividend

A disbursement from a corporation to its shareholders, typically issued in cash, derived from its profits.

Payable

Short-term financial obligations or debts of a company, typically to suppliers, that are due to be paid within one year.