Suppose That the Federal Reserve Is Concerned About the Effects

question 359

Multiple Choice

Suppose that the Federal reserve is concerned about the effects of rising stock prices on the economy. What could it do?

• A)buy bonds to raise the interest rate
• B)Buy bonds to lower the interest rate
• C)sell bonds to raise the interest rate.
• D)Sell bonds to raise the interest rate

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Definitions:

Inventories

Quantities of goods that are held by a company in anticipation of being sold or used in production processes.

Manufacturers

Entities or individuals that use raw materials, parts, and components to produce finished goods through various processes, machinery, and operations.

Unexpected Changes

Unexpected changes refer to unforeseen events or shifts in the marketplace, economies, or natural environment that can significantly impact businesses, economies, and societies.

Price Indexes

Statistical measures that track changes in the price level of a basket of goods and services over a period of time.