Suppose That the Current Federal Funds Rate Is Below the Federal

question 21

Multiple Choice

Suppose that the current federal funds rate is below the federal funds target rate.In order to raise the federal funds rate the Fed will ________________ securities on the open market which will ________________ the supply of reserves in the market for reserves,pushing the rate closer to the target rate.

• A) sell; increase
• B) purchase; increase
• C) purchase; decrease
• D) sell; decrease

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Definitions:

Voltmeter

Device that measures the strength of electrical voltage by recording the difference in electrical potential between two points.

Current Meter

An instrument used for measuring the velocity and direction of water flow in rivers, streams, and oceans.

Patch Technique

A method in electrophysiology that involves sealing a tiny glass pipette onto a small patch of cell membrane to study ion channels.

Microelectrode

A very small electrode used to measure electrical activity in tissues such as the brain or muscles, often in neuroscience research.