When the Flow of Money Is Tight, the Price of Short-Term

question 72

Multiple Choice

When the flow of money is tight, the price of short-term loans will be bid ________ and the federal fund rate (FFR) will ________.

• A) up; rise
• B) down; rise
• C) up; fall
• D) down; fall
• E) up in good economic times and down in difficult economic times; vary
• Depending on market forces

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Definitions:

Transformation

In an economic context, it refers to the process of changing inputs into outputs, often related to the production process in industries or economies.

Resources

Assets, materials, and inputs used by organizations or economies to produce goods and services.

Outputs

Refers to the total amount of goods or services produced by a company or an economy.

Comparative Advantage

The potential of an individual, enterprise, or country to offer a product or service with a more favorable opportunity cost than that available to its competitors.