What Is a Key Power of the Fed

question 54

Multiple Choice

What is a key power of the Fed?

• A)the power to change tax rates
• B)the power to lower the budget deficit
• C)the power to lower the total national debt
• D)the power to expand and contract the amount of credit available in the United States

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Definitions:

Special Purpose Vehicle

A subsidiary company created to isolate financial risk, often utilized in securing assets and securitization transactions.

Convertible Bonds

Bonds issued by a corporation that can be converted into a predetermined number of shares of the corporation's stock at the bondholder's option.

Call Provision

A feature in certain contracts allowing the issuer the right to redeem or pay off the contract before its maturity date, usually bonds.

Convertible Bonds

Convertible bonds are a type of bond that can be converted into a predetermined number of the issuer's equity shares at certain times during its life, usually at the discretion of the bondholder.