The FOMC Targets the Federal Funds Rate, but If They

question 38

Multiple Choice

The FOMC targets the federal funds rate, but if they are going to alter the course of the economy they must influence the:

• A) real interest rate as well.
• B) long-term nominal interest rate as well.
• C) real exchange rate as well.
• D) nominal exchange rate as well.

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Definitions:

Res Ipsa Loquitur

A legal doctrine that infers negligence on the part of the defendant when the accident that caused the injury is one that ordinarily does not occur in the absence of negligence.

Negligence

The failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances.

Crab Salad

A dish typically made with crab meat, mayonnaise, and various other ingredients such as celery, onion, and seasonings.

Agony of the Moment

An intense, often fleeting emotional response to a particularly stressful or traumatic experience.