If the Fed Wants to Raise Interest Rates, Then It

question 101

Multiple Choice

If the Fed wants to raise interest rates, then it can use its open market operations to:

• A) increase the money supply.
• B) decrease the money supply.
• C) increase money demand.
• D) decrease money demand.

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Definitions:

Antagonist

A substance that interferes with or inhibits the physiological action of another, particularly in pharmacology referring to a drug that blocks the action of a neurotransmitter or hormone.

Excitatory Postsynaptic Potentials

Electrical changes in a neuron that increase the likelihood it will fire an action potential, usually in response to neurotransmitter release.

Brain Maturation

The process of growth and development of the brain, affecting cognitive abilities, emotional regulation, and neural connectivity.

All-or-None Law

A principle stating that the strength of a response of a nerve or muscle fiber is not dependent on the strength of the stimulus. If a stimulus is above a certain threshold, a nerve or muscle fiber will fire.