The Fed Can Engage in Preemptive Strikes Against a Rise

question 93

Multiple Choice

The Fed can engage in preemptive strikes against a rise in inflation by ________ the federal funds interest rate;it can act preemptively against negative demand shocks by ________ the federal funds interest rate.

• A)raising;lowering
• B)raising;raising
• C)lowering;lowering
• D)lowering;raising

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Definitions:

Schedule E

A form used by taxpayers in the United States to report income and losses from rental property, royalties, partnerships, S corporations, estates, trusts, and residual interests in REMICs.

Depreciation

The reduction in the value of an asset over time, due to wear and tear, age, or obsolescence.

Security Deposit

Funds provided by a tenant to a landlord at the start of a lease as protection against damage or non-payment of rent, usually refundable under certain conditions.

Rental Income

Income received from renting out property, such as real estate or personal property, which must be reported on tax returns and is subject to income tax.