The Fed Tries to Achieve Its Policy Goals in the Macroeconomy

question 43

Multiple Choice

The Fed tries to achieve its policy goals in the macroeconomy by manipulating

• A) the currency component of the monetary base almost exclusively.
• B) the reserve component of the monetary base almost exclusively.
• C) the savings behavior of private citizens.
• D) both the currency and reserve components of the monetary base.
• E) the rate of influx of foreign currency into the country.

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Definitions:

Hypotenuse

The largest side of a right-angled triangle, positioned opposite to the right angle.

Sine

The angular relationship of the opposite side of a right triangle and the hypotenuse.

Opposite

Across from.

Hypotenuse

The longest side of a right-angled triangle, opposite the right angle, and determined by the square root of the sum of the squares of the other two sides.