In the Context of Monetary Policy, Which of the Following

question 62

Multiple Choice

In the context of monetary policy, which of the following statements is true of the discount rate?

• A)The Fed increases it during recessions.
• B)When the cost of acquiring funds from the Fed is low, interest rates on bank loans tend to fall.
• C)When the Fed increases it, banks can obtain funds at a lower cost.
• D)It is the interest rate that the Fed charges on its loans to individuals.

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Definitions:

Specialized Labor

Workers with specific skills and training focused on a particular job or industry, enhancing efficiency and productivity.

Monetary Exchange

The process of trading different forms of money, currencies, or other financial instruments, typically reflecting the value of goods, services, or financial assets in financial transactions.

Double Coincidence

A situation in barter economies where two parties each possess a good or service that the other desires, enabling an exchange.

Likely

Likely refers to a high probability or chance of something happening or being the case, often used to forecast outcomes based on current trends or evidence.