Which of the Following Statements Is True Regarding the Fed's

question 36

Multiple Choice

Which of the following statements is true regarding the Fed's procedures for operating the discount window?

• A) The Fed's operating procedures and paying interest on reserves contains the federal funds rate between the interest rate paid on reserves and the discount rate.
• B) The Fed's operating procedures and paying interest on reserves creates more fluctuation in the federal funds rate than if they simply didn't pay interest on reserves.
• C) The Fed's operating procedures and paying interest on reserves has no impact on the fluctuation of the federal funds rate.
• D) None of the above is correct.

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Definitions:

Voluntary Export Restraints

These are self-imposed limits by exporting countries on the volume of their exports to a particular country, usually to avoid stricter trade barriers.

Administers

The act of managing, directing, or overseeing individuals or processes.

Tariff

A tax imposed on imported goods and services to control trade volumes, protect domestic industries, or generate revenue.

Efficiency

The optimal allocation and utilization of resources to maximize productivity and minimize waste in the production of goods and services.