To Achieve Its Target When the Federal Funds Rate Is

question 157

Multiple Choice

To achieve its target when the federal funds rate is above the target range, the Fed should:

• A)follow expansionary policy.
• B)follow contractionary policy.
• C)buy foreign currency.
• D)do nothing.

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Definitions:

Heuristic

A problem-solving strategy using a practical method or various shortcuts to produce solutions that may not be optimal but are sufficient for reaching immediate goals.

Prototype

An original model or preliminary version of a product from which other forms are developed or copied.

Algorithm

A process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer.

Mental Image

A representation of a sensory experience in the mind, which can be visual, auditory, or related to other senses, even in the absence of external stimuli.