Discount Lending by the Fed

question 15

Multiple Choice

Discount lending by the Fed:

• A)is the key component of monetary policy.
• B)is more important today than in years past.
• C)is not as important today as it was in the past.
• D)amounts to five billion dollars in volume during an average week.

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Definitions:

Tax on Sellers

A financial charge imposed by the government on sellers, which can shift the supply curve upward and affect market equilibrium.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.

Tax on Buyers

A financial charge imposed directly on purchasers, affecting the demand side by potentially reducing the quantity of goods or services bought.

Sellers Receive Less

A situation where suppliers earn less revenue than expected due to market factors such as decreased demand or increased competition.