(Figure: Interest Rate Targeting) the Figure Shows Interest Rate Targeting

question 41

Multiple Choice

(Figure: Interest Rate Targeting) The figure shows interest rate targeting. Initially, the fed funds interest rate equilibrium (E) is the targeted interest rate (iT) . If money demand increases, the Federal Reserve _____ to maintain the interest rate target.

• A) decreases the interest rate
• B) increases the interest rate
• C) decreases the money supply
• D) increases the money supply

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Definitions:

Union Dues

Fees paid by members to a union to fund activities, including collective bargaining, legal actions, and member services.

Union-Negotiated

Agreements or contracts about wages, working conditions, and other employment terms that are discussed and decided upon through collective bargaining by unions on behalf of employees.

Retirement Account

A financial account designed specifically for savings for retirement, often offering tax advantages.

National Labor Relations Board

A federal agency established in the United States to enforce labor laws in relation to collective bargaining and unfair labor practices.