Usually, the Federal Reserve Changes Its Target for the Federal

question 69

Multiple Choice

Usually, the Federal Reserve changes its target for the federal funds rate in units of

• A) 1/4 of 1 percentage point.
• B) 1 percentage point.
• C) 2 percentage points.
• D) 5 percentage points.

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Definitions:

Municipal Bonds

Debt securities issued by municipalities to finance public projects, such as building schools or highways, generally offering tax-exempt interest payments to investors.

Tax Advantage

Financial benefits that accrue due to preferential tax treatment of certain investments or transactions.

Corporate Bond

A type of debt security issued by corporations to raise capital, where the corporation promises to repay the principal along with interest at a specified future date.

Municipal Bond

A debt security issued by municipalities to finance public projects, such as roads and schools, typically offering tax-free interest payments to investors.