To Make Sure That the Federal Funds Rate Does Not

question 33

Multiple Choice

To make sure that the federal funds rate does not fall much below the floor set by the interest rate on excess reserves,the Federal Reserve has set up the ________ facility in which these nonbank lenders can lend to the Fed and earn an interest rate that is close to the interest rate the Fed pays on excess reserves.

• A)reverse repo
• B)Term Securities Lending
• C)Term Auction
• D)Primary Dealer Credit

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Definitions:

Common-Carrier Delivery Contract

A type of contract in which purchased goods are delivered to the buyer via an independent contractor, such as a trucking line.

Independent Contractor

An individual or entity contracted to perform work for another entity as a non-employee.

Agent

An individual or entity authorized to act on behalf of another, often in a business or legal context.

Goods-In

Refers to incoming goods; a term used in inventory management to describe goods that have been received but not yet processed.