The Fed Tends Not to Use Discount Policy as Its

question 34

Multiple Choice

The Fed tends not to use discount policy as its principal tool in influencing the money supply since

• A)discount loans do not affect the money supply.
• B)it does not have as much control over discount loans as it has on open market operations.
• C)it is prohibited from doing so by an act of Congress.
• D)it prefers to use reserve requirements.

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Definitions:

Retroactive Interference

A phenomenon in which subsequently learned material lowers the probability of recalling earlier learned material.

Recall

is a measure of memory in which a person must retrieve information learned earlier, as on a fill-in-the-blank test.

Godden And Baddeley

Psychologists known for their study on context-dependent memory, demonstrating how the environment where learning occurs can affect recall.

Visual Imagery

The mental visualization of scenes, objects, or events without their physical presence.