If the Fed Carries Out an Open Market Operation and Sells

question 74

Multiple Choice

If the Fed carries out an open market operation and sells U.S.government securities, the federal funds rate ________ and the quantity of reserves ________.

• A) falls; increases
• B) rises; increases
• C) rises; does not change
• D) falls; decreases
• E) rises; decreases

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Definitions:

Motor Neuron

A type of neuron that initiates and controls the contraction of muscles, transmitting signals from the brain or spinal cord to the body's muscles.

Cerebral Cortex

The outer layer of the brain involved in high-level functions such as sensation, voluntary muscle movement, thought, reasoning, and memory.

Frontal Lobes

Found at the anterior part of each cerebral hemisphere, this segment of the brain is in charge of initiating voluntary movements, facilitating expressive speech, and controlling superior executive functions.

Occipital Lobes

The backmost section in each half of the brain, mainly tasked with interpreting visual data.