All of the Following Are Tools Used by the Fed

question 52

Multiple Choice

All of the following are tools used by the Fed for setting monetary policy EXCEPT

• A) lowering the reserve requirement.
• B) authorizing a government spending sequester.
• C) lowering the discount rate.
• D) selling Treasury Securities to decrease the money supply.
• E) increasing the reserve requirement and discount rate.

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Definitions:

Excise Tax

A tax charged on specific goods and services, such as tobacco, alcohol, and gasoline, typically imposed at the manufacturing or production level.

Perfectly Elastic

A situation in economics where the quantity demanded or supplied responds infinitely to changes in price.

Excise Tax

A tax levied on specific goods, services, or transactions, often included in the price of products like tobacco, alcohol, and gasoline.

Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.