If the Fed Adopts a Policy of Pegging the Interest

question 23

Multiple Choice

If the Fed adopts a policy of pegging the interest rate,a ________ in government spending forces the Fed to increase the money supply to prevent interest rates from ________.

• A)fall;increasing
• B)fall;decreasing
• C)rise;decreasing
• D)rise;increasing

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Definitions:

Assets

Economic resources owned or controlled by a business or an individual that are expected to produce value.

Accounting Information System

A system designed to collect, store, manage, process, retrieve, and report financial data for its users.

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and statement of cash flows.

Payroll Taxes

Financial obligations required from both employers and employees, usually based on a percentage of the compensation that employers distribute to their staff.