The Fed Can Decrease the Federal Funds Rate by

question 116

Multiple Choice

The Fed can decrease the federal funds rate by

• A)Selling government bonds.
• B)Buying government bonds,which causes market interest rates to fall.
• C)Simply announcing a lower rate because the Fed has direct control of this interest rate.
• D)Changing the money multiplier.

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Definitions:

Level of Stress

The degree or intensity of stress an individual is experiencing at any given time.

Income Quintiles

A statistical measure dividing a population into five equal groups according to their income level for comparative analysis.

Government Spending

Expenditures by the government sector on goods and services that it consumes to provide public services and for the benefit of the community.

Personal Income Tax

Tax levied on individuals or households based on their total income from all sources.