If the Fed Decreases the Discount Rate, What Happens to Reserves

question 54

Multiple Choice

If the Fed decreases the discount rate, what happens to reserves and the money supply?

• A)Reserves increase and the money supply decreases.
• B)Both increase.
• C)Reserves decrease and the money supply increases.
• D)Both decrease.

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Definitions:

Positive Reinforcement

A technique in behavior modification that involves providing a reward following a desired behavior to increase the likelihood of its recurrence.

Disruptive Behaviour

Actions that disturb or interrupt normal processes, events, or activities, often marked by aggression or defiance.

Criticize

To express disapproval of someone or something based on perceived faults or mistakes.

Resistance To Extinction

The persistence of a learned behavior even after reinforcement is no longer presented, often observed in conditioning studies.