If There Are No Changes in Inflation Expectations,a Sale of Government

question 70

Multiple Choice

If there are no changes in inflation expectations,a sale of government bonds by the Fed in the open market will cause ________.

• A) both the federal funds rate and the long-term expected real interest rate to rise
• B) both the federal funds rate and the long-term expected real interest rate to fall
• C) the federal funds rate to rise and the long-term expected real interest rate to fall
• D) the federal funds rate to fall and the long-term expected real interest rate to rise

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Definitions:

Long-Term Customer Relationships

The development and maintenance of enduring relationships between a business and its customers, leading to repeat business and loyalty.

Types of Utility

The different ways in which goods or services can provide value to consumers, including form, time, place, and possession utility.

Ideal Expectation

The highest or most perfect level of expectation that consumers hold regarding a product or service and its performance.

Minimum Tolerable Expectation

The lowest level of performance or outcome that is acceptable to stakeholders or within a certain context.