Which of the Following Is Not a Method by Which

question 109

Multiple Choice

Which of the following is not a method by which the Federal Reserve establishes monetary policy?

• A) setting reserve requirements
• B) altering the discount rate
• C) through federal open market operations
• D) setting bank profitability ratios

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Definitions:

Issuing Securities

The process by which a corporation offers new stocks or bonds to the public or existing shareholders or bondholders.

Secondary Market

The financial market where investors purchase and sell securities they already own, as opposed to the primary market where securities are first issued.

Firms

Firms are business organizations engaged in commercial, industrial, or professional activities, typically comprised of a partnership or a corporation.

Primary Market

The financial market for new securities issues where corporations sell new stocks and bonds to the public for the first time.