To Achieve Its Target When the Federal Funds Rate Is

question 26

Multiple Choice

To achieve its target when the federal funds rate is below the target range, the Fed could:

• A)buy bonds.
• B)reduce the reserve requirement.
• C)increase the reserve requirement.
• D)cut the discount rate.

---

Definitions:

Substitute Good

A product or service that can be easily replaced with another by consumers, often because it performs a similar function.

Price of Fish

The cost for which fish is sold in the market, influenced by factors such as species, availability, demand, and fishing costs.

Equilibrium Quantity

The quantity supplied and demanded at the equilibrium price, where the quantity that buyers are willing to buy is equal to the quantity sellers are willing to sell.

Bulletproof Vests

Protective clothing designed to absorb or deflect bullet impacts, providing safety to the wearer from firearm projectiles.