Which of the Following Statements Is an Example of the Fed's

question 73

Multiple Choice

Which of the following statements is an example of the Fed's conditional commitment policy?

• A)"In these circumstances,the Committee believes that policy accommodation can be maintained for a considerable period."
• B)"The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."
• C)"Policy accommodation can be removed at a pace that is likely to be measured."
• D)"The exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent,and inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal."

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Definitions:

Total Profit

The total income a business generates after all expenses and costs have been subtracted from total revenue.

Convertible Bond

A type of bond that can be converted into a predetermined number of the issuer's equity shares at certain times during the bond's life, usually at the discretion of the bondholder.

Conversion Price

The predetermined price at which convertible security can be converted into common stock.

Conversion Value

The value of a convertible security if it is converted into a specified number of shares of common stock.