The Interest Rate That the Fed Targets for Its Monetary

question 54

Multiple Choice

The interest rate that the Fed targets for its monetary policy is the

• A)commercial paper rate.
• B)federal funds rate.
• C)Treasury bond coupon rate.
• D)one-year certificate of deposit rate.

---

Definitions:

Utility Maximizing

Acting in a way to achieve the highest level of satisfaction possible with available resources.

Demand For Labor

The total amount of labor that employers want to hire at various wage rates, contingent on factors such as technology, the price of the goods being produced, and the availability of other inputs.

Reduced Wage

A wage that is decreased from a previous level, often due to economic pressures or changes in job responsibilities.

Income Effect

The alteration in a person's or economic system's earnings and the effect of this alteration on the demand for a particular product or service.