If the Fed Wishes to Reduce Nominal Interest Rates, It

question 14

Multiple Choice

If the Fed wishes to reduce nominal interest rates, it must engage in an open market ________ of bonds that ________ the money supply.

• A)sale; increases
• B)sale; decreases
• C)purchase; decreases
• D)purchase; increases

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Definitions:

Electoral Institutions

Organizations and systems that organize, oversee, and regulate the process of electing representatives in a democracy.

Representative Institutions

Bodies or organizations that are elected or appointed to act on behalf of a larger group of people, such as legislatures or councils.

Enfranchise

To enfranchise is to grant voting rights to an individual or group, thereby providing them the power to participate in choosing their government representatives.

Disenfranchise

The act of depriving someone of the right to vote or other rights of citizenship.