The Tool Most Frequently Relied on by the Fed Is

question 174

Multiple Choice

The tool most frequently relied on by the Fed is

• A)interest rate changes.
• B)changing the money multiplier.
• C)changing the discount rate.
• D)open-market operations.
• E)changing the reserve ratio.

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Definitions:

Disposable Income

The amount of money an individual or household has to spend or save after income taxes are deducted.

Real GDP

A measure of a country's economic output that accounts for changes in the price level, adjusting for inflation or deflation to reflect the true value of goods and services produced.

Inflation Rate

The rise in the average price level of goods and services within an economy throughout a specific time frame.

Calculating GDP

The process of determining the Gross Domestic Product of a country, usually by adding up total consumer spending, investment, government spending, and net exports.