Which of the Following Best Describes the Correct Order of Processes

question 5

Multiple Choice

Which of the following best describes the correct order of processes through which the Fed conducts monetary policy?

• A)By changing reserves, the Fed conducts open market operations, open market operations influence lending, and changes in lending influence credit availability, money supply, deposit creation, and interest rates.
• B)Open market operations influence lending, changes in lending influence reserves, and changes in reserves influence credit availability, money supply, deposit creation, and interest rates.
• C)Open market operations influence reserves, changes in reserves influence lending, and changes in lending influence credit availability, money supply, deposit creation, and interest rates.
• D)Open market operations influence money and credit availability, changes in money and credit availability influence lending, changes in lending influence reserves, and changes in reserves influence deposit creation and interest rates.

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Definitions:

Poor

A socioeconomic status characterized by a lack of financial resources and access to basic life necessities.

Meth

A powerful, addictive stimulant drug, also known as methamphetamine, that affects the central nervous system.

Powder Cocaine

A fine, white crystalline drug obtained from coca leaves, often snorted, that can cause euphoria and addiction; it's contrasted with crack cocaine, a more potent form that's smoked.

Poor Person's Drug

A term referring to inexpensive addictive substances that are more accessible to individuals of lower socioeconomic status.