How Did the Fed Peg Interest Rates During World War

question 39

Multiple Choice

How did the Fed peg interest rates during World War 2?

• A)by setting a low federal funds rate
• B)by agreeing to purchase any bonds that were not purchased by private investors
• C)through extensive use of discount loans
• D)through nationalization of the banking system

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Definitions:

Line

A straight geometrical figure that extends infinitely in both directions without thickness.

Slope

In mathematics, it is the measure of the steepness or incline of a line, defined as the ratio of the vertical change to the horizontal change between two points on the line.

Positive Economics

A branch of economics that focuses on objective analysis and the description of how the economy functions, as opposed to normative economics that involves value judgments.

Normative Economics

An area of economics that makes assessments of economic fairness or desired economic outcomes and aims of public policy.