If the Market Federal Funds Rate Were Above the Target

question 57

Multiple Choice

 If the market federal funds rate were above the target rate, the response from the Fed would likely be to: ?

• A) purchase U.S. Treasury securities.?
• B) sell U.S. Treasury securities.?
• C) lower the IOER.?
• D) lower the discount rate.

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Definitions:

Drive Axle

An axle that is connected to the drive train and responsible for transferring power from the engine to the wheels.

Ring Gear

Spur gear such as that used on a flywheel for engine cranking, or the outer member of a planetary gearset.

Differential Case

The outer housing that encloses the differential mechanism in a vehicle, protecting its gears and components.

Differential Action

The mechanism in a vehicle's differential that allows two drive wheels to rotate at different speeds while turning, improving traction and handling.