If the Federal Reserve Wished to Decrease Interest Rates Using

question 16

Multiple Choice

If the Federal Reserve wished to decrease interest rates using open market operations it would

• A)buy U.S. government securities.
• B)sell U.S. government securities.
• C)buy gold.
• D)buy corporate stocks.

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Definitions:

Securities Exchange Act

A federal law enacted in the United States to regulate the trading of securities in the secondary market, to ensure transparency and fairness.

Internal Revenue Code

The body of law governing federal tax administration in the United States.

Felony

A serious crime, typically involving violence, regarded as more severe than a misdemeanor, and generally punishable by imprisonment for more than one year or by death.

Misdemeanor

A criminal offense that is less serious than a felony and generally punishable by fines, penalties, or a short term in jail.