Which of the Following Statements Is Incorrect with Respect to the Federal

question 25

Multiple Choice

Which of the following statements is incorrect with respect to the federal funds rate?

• A) It is the rate charged by financial institutions on loans they extend to each other.
• B) It is not influenced by the supply of and demand for funds in the federal funds market.
• C) The federal funds rate is closely monitored by all types of firms.
• D) Many market participants view changes in the federal funds rate as an indicator of potential changes in other money market rates.
• E) The Federal Reserve adjusts the amount of funds in depository institutions in order to influence the federal funds rate.

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Definitions:

Malaria

A serious disease caused by Plasmodium parasites, transmitted to humans through the bite of infected Anopheles mosquitoes, characterized by fever, chills, and flu-like illness.

Sea Anemone

A marine animal with a polyp attached to the sea bottom, displaying a ring of tentacles around a central mouth.

Brittle Star

A type of echinoderm with a central disc and five long, slender, flexible arms, known for their ability to regenerate limbs and move by wriggling their arms.

Deuterostomes

Lineage of bilateral animals in which the second opening on the embryo surface develops into a mouth; for example, echinoderms and chordates.