What Happens When the Fed Aims to Change Interest Rates

question 107

Multiple Choice

What happens when the Fed aims to change interest rates?

• A) It asks Congress to legislate new interest rates.
• B) It buys or sells government bonds on the open market to achieve the desired rate.
• C) It buys or sells dollars on the foreign exchange market to achieve the desired rate.
• D) It announces a new discount interest rate.

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Definitions:

Prefrontal Cortex

The front part of the frontal lobes of the brain, involved in planning complex cognitive behaviors, personality expression, decision making, and moderating social behavior.

Corpus Callosum

The large band of neural fibers connecting the two hemispheres of the brain, facilitating interhemispheric communication.

Copy

To duplicate something such as a document, file, or piece of artwork, producing an identical or very similar version of the original.

Frontal Association Area

A region of the frontal cortex involved in higher-order functions such as planning, decision-making, and moderating social behavior.