Before the Financial Crisis, If the Fed Wanted to Lower

question 16

Multiple Choice

Before the financial crisis, if the Fed wanted to lower the federal funds rate, it would

• A)increase the discount rate.
• B)increase the reserve ratio.
• C)buy government securities in the open market.
• D)sell government securities in the open market.

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Definitions:

Desired Response

The specific behavior or outcome that an individual or entity aims to elicit through a particular action or stimulus.

Immediately After

Occurring directly following a particular event or time.

Negatively Reinforced

Refers to the process of increasing a behavior by removing or avoiding a negative outcome or stimulus.

Positively Reinforced

The process of increasing the likelihood of a behavior by following it with a desirable outcome or reward.