Once the Fed Decides on the Interest Rate It Wants

question 4

Multiple Choice

Once the Fed decides on the interest rate it wants in the federal funds market, its most common method of achieving this rate is by

• A) conducting open market operations.
• B) changing reserve requirements.
• C) changing tax rates.
• D) altering exchange rates.

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Definitions:

Average Number

Denotes the numerical value found by dividing the sum of all values in a set by the count of values in the set.

μ

The sign typically utilized to denote the average or mean in math and statistical analysis.

Poisson Distribution

A numerical distribution detailing the probability of specific event counts happening over a determined timeframe or spatial range.

Negative Exponential Distribution

A probability distribution used to model the time between events in a Poisson process, representing the decay of quantities.