When the Federal Reserve Makes a Loan at the Discount

question 31

Multiple Choice

When the Federal Reserve makes a loan at the discount window to a bank, which of the following will happen?

• A)It will increase bank reserves and immediately lower the interest rate.
• B)It will increase bank reserves and decrease the monetary base.
• C)It  will increase bank reserves but have no effect on the monetary base.
• D)It will increase bank reserves and increase the monetary base.

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Definitions:

Electrooculograph

A technique for measuring the corneo-retinal standing potential between the front and the back of the human eye, used to track eye movements.

Electroencephalograph

A device used to record the electrical activity of the brain, often employed in the diagnosis and monitoring of neurological conditions.

Electrocardiograph

A medical device used to record the electrical activity of the heart over a period, useful for diagnosing heart conditions.

Anesthesia Awareness

A rare condition where a patient becomes conscious during surgery but is unable to move or communicate.