A Basic Policy Instrument That the Fed Uses to Execute

question 62

Multiple Choice

A basic policy instrument that the Fed uses to execute monetary policy is which of the following?

• A) changing bank interest rates.
• B) changing the lending/discount rate.
• C) issuing securities.
• D) buying loans from mortgage banks.

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Definitions:

Movement Along

Refers to changes in the quantity demanded or supplied of a good in response to price changes, moving along a demand or supply curve.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers, normally sloping downwards from left to right.

Milk Consumption

Refers to the amount of milk and milk products that individuals drink or use over a certain period.

Milk Prices

the cost at which milk is sold, often influenced by factors like supply, demand, and regulations.