Which of the Following Tools Is NOT a Policy Tool

question 546

Multiple Choice

Which of the following tools is NOT a policy tool of the Fed?

• A) last resort loans
• B) the tax rate on interest income
• C) the reserve ratio
• D) open market operations

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Definitions:

Inelastic Demand

A situation where the demand for a product does not change significantly in response to a change in its price.

Income Elasticity

A measure that shows how a change in income affects the demand for a good or service.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Plasma Screen

A type of display technology used in televisions and computer monitors, known for its bright, clear images and wide viewing angles.