"Banging the Gong" Means That the Fed

question 182

Multiple Choice

"Banging the gong" means that the Fed

• A)has lowered the discount rate and raised the fed funds target rate.
• B)has raised the discount rate and lowered the fed funds target rate.
• C)changes the discount rate and the fed funds target rate simultaneously.
• D)sells securities in the open market.

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Definitions:

Consumer Surplus

The differential between the overall amount consumers are willing and financially prepared to spend on a good or service, and what they end up spending.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, essentially the extra benefit to producers from selling at the market price.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is unobtainable.

Producer Surplus

The difference between the amount that producers are willing to accept for a good or service and the actual amount they receive.