If the Fed Increases Its Open Market Purchases of Government

question 94

Multiple Choice

If the Fed increases its open market purchases of government securities,it exerts a downward pressure on the interest rate.Such a phenomenon is usually referred to as the ___________________ effect.

• A) income
• B) substitution
• C) open market
• D) liquidity
• E) expectations

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Definitions:

Unlimited Personal Liability

A legal obligation that holds an individual personally responsible for all debts and obligations of a business, without any limit on the amount that can be claimed.

Duty Of Care

A legal obligation imposed on an individual requiring that they adhere to a standard of reasonable care while performing any acts that could foreseeably harm others.

Honest Mistake

An error made in good faith without the intention to deceive or cause harm.

Liability For Mistake

A legal principle that holds parties accountable for errors that result in a breach of contract or harm to another party.