The Purpose of the Commitment by the Fed to Keep

question 101

Multiple Choice

The purpose of the commitment by the Fed to keep the federal funds rate at zero for a long period of time is to

• A)lower the long term interest rates.
• B)lower the short term interest rates.
• C)increase the long term interest rates.
• D)increase the short term interest rates.

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Definitions:

Trade Discount

A reduction in the list price granted by wholesalers or manufacturers to retailers or other buyers in the same trade to encourage bulk purchasing.

Suggested List Price

Refers to the price that manufacturers propose retailers sell a product for, serving as a guideline.

Cashmere Sweater

A cashmere sweater is a luxurious garment made from the soft undercoat of the cashmere goat, known for its warmth, lightness, and softness.

Cumulative Discounts

Price reductions based on the volume or quantity of items purchased over time.