If There Is a Recession, the Fed Would Most Likely

question 40

Multiple Choice

If there is a recession, the Fed would most likely:

• A) increase bank reserves by raising the discount rate.
• B) increase bank reserves by buying government securities.
• C) decrease bank reserves by raising the discount rate.
• D) decrease bank reserves by selling government securities.

---

Definitions:

Amortization

The process of spreading out a loan or intangible asset cost over a specified period of time.

Installment Notes

Long-term debts that are paid back in regular, periodic payments over time, which include both the principal and interest.

Journal Entries

Records of financial transactions in order by date, used in accounting.

Retirement

The act of leaving one's job and ceasing to work, typically upon reaching a certain age, often associated with receiving pension or retirement benefits.