If the Target Federal Funds Rate Reaches Zero the FOMC

question 72

Multiple Choice

If the target federal funds rate reaches zero the FOMC:

• A)must stop purchasing securities since they cannot lower nominal rates below zero.
• B)would likely shift their focus to purchasing longer-term securities.
• C)would likely raise the required reserve rate.
• D)would likely raise the discount rate.

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Definitions:

Steering Wheel Indicator Light

A light or symbol on the dashboard that indicates information or warnings related to steering or the vehicle's direction control systems.

Electric Assist System

A system within a vehicle designed to provide supplementary power to assist the driver, often used in steering or braking systems.

Socket

A tool or device into which something else is inserted, often used to refer to a wrench part that fits over a nut or bolt head.

Stud

A type of fastener that is threaded on both ends; one end is screwed into a tapped hole and the other end typically holds a nut.