If the Fed Lowers the Discount Rate (Relative to the Federal

question 18

Multiple Choice

If the Fed lowers the discount rate (relative to the federal funds rate) ,banks will (likely) borrow __________ from the Fed,which will __________ reserves in the banking system,and eventually __________ the money supply.

• A) less; decrease; lower
• B) more; increase; raise
• C) the same amount; not change; lower
• D) more; decrease; raise
• E) none of the above

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Definitions:

Pupil

The opening in the center of the iris of the eye that allows light to strike the retina.

Dim Room

A dim room is a space where the lighting is intentionally kept low, either for ambiance, to reduce energy consumption, or to facilitate certain activities or experiments.

Widens

To become broader or more open in space or time.

Hue

A color or shade in the spectrum, distinguished by its wavelength of light.