The Main Tools That the Fed Can Use to Alter

question 247

Multiple Choice

The main tools that the Fed can use to alter the reserves of commercial banks are the required-reserve ratio and all of the following, except

• A) exchange rates.
• B) the discount rate.
• C) interest on reserves.
• D) open-market operations.

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Definitions:

Pupil Dilation

The expansion of the pupil of the eye, often in response to low light conditions or as an expression of emotion.

Withdrawal Reflex

A spinal reflex that causes immediate withdrawal from a painful or harmful stimulus.

Interneurons

Neurons that transmit impulses between other neurons, especially as part of reflex arcs in the nervous system.

Endorphins

Natural pain-relieving peptides produced by the brain that also enhance feelings of pleasure.