Other Things Constant, If the Fed Decreased the Discount Rate

question 155

Multiple Choice

Other things constant, if the Fed decreased the discount rate,

• A) the earnings of the Fed would increase.
• B) the incentive of commercial banks to borrow from the Fed would be reduced.
• C) borrowing from the Fed will tend to increase and the money supply will tend to expand.
• D) borrowing from the Fed will tend to decrease and the money supply will tend to decline.

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Definitions:

Schema

A cognitive framework or concept that helps organize and interpret information from the world around us, allowing for understanding and prediction of experiences.

Clustering

A technique used in various fields such as statistics, machine learning, and data mining to group objects based on their similarities.

Schemata

Mental structures that represent generalized ideas or concepts that are used to organize and interpret information.

Semantic Network

A theoretical structure that illustrates the relationships between ideas in a form of networks based on their meanings.