If the Fed Wanted to Shift to a More Restrictive

question 140

Multiple Choice

If the Fed wanted to shift to a more restrictive monetary policy, it would

• A) expand the reserves available to the banking system, which would drive down short term interest rates.
• B) reduce the reserves available to the banking system, which would drive down short term interest rates.
• C) expand the reserves available to the banking system, which would drive up short term interest rates.
• D) reduce the reserves available to the banking system, which would drive up short term interest rates.

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Definitions:

New Price

The updated or most recent cost at which an item or service is sold in the market.

Standard Suite

A collection of benchmarks, protocols, or specifications that establish a norm or minimum level of acceptability for products, services, or practices.

Total Optimal Cost

The lowest possible sum of costs achieved by optimizing the allocation of resources in operations or production.

Double-subscripted Variables

variables in mathematics and programming denoted with two subscripts, usually to represent matrix elements or the interaction between two dimensions.