Everything Else Held Constant,in the Market for Reserves,when the Federal

question 84

Multiple Choice

Everything else held constant,in the market for reserves,when the federal funds rate is 3%,raising the discount rate from 5% to 6%

• A)lowers the federal funds rate.
• B)raises the federal funds rate.
• C)has no effect on the federal funds rate.
• D)has an indeterminate effect on the federal funds rate.

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Definitions:

Retained Earnings

The share of a company's earnings that are held back and not distributed as dividends to its shareholders.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, indicating the company's financial performance.

Retained Earnings

The part of net profits that is not distributed as dividends but is kept by the company for reinvestment in its primary business or for debt repayment.

Dividends Declared

Profits distributed by a company to its shareholders, usually determined by the company's board of directors.