If the Fed Raises the Discount Rate, What Happens to Reserves

question 83

Multiple Choice

If the Fed raises the discount rate, what happens to reserves and the money supply?

• A) Reserves increase and the money supply decreases.
• B) Both increase.
• C) Reserves decrease and the money supply increases.
• D) Both decrease.

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Definitions:

Active Listening

The process of fully concentrating on what is being said rather than just passively ‘hearing’ the message, involving feedback and empathy towards the speaker.

Communication Process

The sequence of steps by which a message is transmitted from a sender to a receiver, including encoding, channel selection, decoding, and feedback.

Adaptive Selling

A sales strategy that involves customizing the sales approach based on the behavior, needs, and reactions of the customer.

Acceptance Signals

Subtle or explicit cues from a prospect or customer indicating a readiness or interest in proceeding with a purchase or agreement.