If the Fed Fears Inflation It Will Undertake an Open

question 205

Multiple Choice

If the Fed fears inflation it will undertake an open market ________ of securities, the federal funds rate will ________ and the long-term real interest rate will ________.

• A) sale; rise; fall
• B) sale; rise; rise
• C) purchase; rise; fall
• D) purchase; fall; rise

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Definitions:

Uncontrollable Factors

External elements or conditions that cannot be directly managed or influenced by an organization, often affecting strategic planning and performance.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price.

Supply

The total amount of a specific good or service that is available to consumers at a given price point and time.

Complements

Goods or services that are used together, where the use or value of one increases the use or value of the other.