What Kind of Fed Activity Is Likely to Be Evident

question 7

Multiple Choice

What kind of Fed activity is likely to be evident when the Fed desires to drain reserves out of the banking system and underscore a policy move toward restraint?

• A)No Fed buying or selling is likely to occur.
• B)The Fed is likely to use reverse repurchase agreements.
• C)The Fed is likely to engage in system repurchase agreements.
• D)The Fed is likely to engage in outright sales.

---

Definitions:

Nonproduction Workers

Employees who are not directly involved in the production process, including roles in administration, management, and support services.

Service-Providers

Organizations or individuals that offer services to others, often in a professional, maintenance, or consultative capacity.

Combined Distribution Plans

Retirement or benefit plans that incorporate features of both defined contribution and defined benefit plans, offering a combination of guaranteed payouts and contributions based on individual accounts.

Gain-Sharing Plans

A type of incentive plan where employees receive benefits from cost-savings or productivity improvements they contribute to, enhancing teamwork and efficiency.