The Fed Is Concerned That Inflation Might Occur

question 70

Multiple Choice

The Fed is concerned that inflation might occur.To help eliminate this possibility, the Fed could ________ government securities to ________ the federal funds rate in the short run.

• A) buy; lower
• B) buy; raise
• C) sell; lower
• D) sell; raise
• E) sell; not change

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Definitions:

Compensatory Damages

Monetary awards given to a plaintiff to compensate for losses or injuries suffered as a result of the defendant's actions.

Plaintiff

The party who initiates a lawsuit in court seeking legal remedy from the defendant.

Contract

An agreement that is enforceable by law and involves two or more parties, making it legally binding.

Contractual Condition

A specific requirement outlined in a contract that must be met for the contract to be fully enforceable.