When the Fed Increases the Discount Rate, It

question 101

Multiple Choice

When the Fed increases the discount rate, it:

• A)increases the reserve-deposit ratio (rr).
• B)decreases the reserve-deposit ratio (rr).
• C)is likely to increase the monetary base (B).
• D)is likely to decrease the monetary base (B).

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Definitions:

Laboratory

A controlled setting designed for scientific experimentation, observation, and research.

Field Experiments

Experiments conducted in natural settings rather than in the lab, allowing for the examination of more realistic behavioral responses.

Effect Size

A quantitative measure of the magnitude of the experimental effect, indicating the size of the difference between groups or the strength of a relationship between variables.

Exact Replications

Exact replications involve conducting studies or experiments by closely duplicating the methodology of previous research to validate or challenge the original findings.