If the Fed Were to Increase the Discount Rate So

question 126

Multiple Choice

If the Fed were to increase the discount rate so that it was much higher than the federal funds rate,eventually

• A) reserves would decrease and the money supply would decrease.
• B) reserves would increase and the money supply would increase.
• C) reserves would decrease and the money supply would increase.
• D) reserves would increase and the money supply would decrease.
• E) there is no impact on reserves or the money supply.

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Definitions:

Discussion Method

An educational technique where participants engage in interactive discussions to deepen understanding, explore ideas, and facilitate learning.

Similar Experiences

Instances or situations that share common characteristics or features with others, potentially affecting learning or performance.

Seating Arrangement

The organization and placement of seats in a space, often designed to facilitate communication, visibility, or interaction in meetings, events, or public spaces.

Aptitude-Treatment Interaction

A theory in educational psychology that suggests the effectiveness of a particular teaching method depends on the learner's aptitude.