If There Is No Discount Lending, the Fed Must Change

question 45

Multiple Choice

If there is no discount lending, the Fed must change the _____ to change the equilibrium federal funds rate.

• A) discount rate
• B) reserve requirement
• C) both of the above
• D) neither of the above

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Definitions:

Seasonal Revenues

Income generated from business activities that fluctuates according to the season or a particular time of year, typical in industries like retail and agriculture.

Full Disclosure

A principle that requires a company to provide all necessary information in its financial statements that affects the understanding of those statements.

Insider Information

Insider information involves confidential information about a company that has not been made public and that could provide a financial advantage in the markets if known.

Financial Markets

Marketplaces where buyers and sellers engage in trade of financial assets like stocks, bonds, currencies, and derivatives.