Which of the Following Describes What the Fed Would Do

question 153

Multiple Choice

Which of the following describes what the Fed would do to pursue an expansionary monetary policy?

• A)use open market operations to buy Treasury bills
• B)use open market operations to sell Treasury bills
• C)use discount policy to raise the discount rate
• D)raise the reserve requirement

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Definitions:

Asset-Based Lending

A type of financing where loans are given based on the value of an individual's or company's assets.

Loan Collateral

Assets or property pledged by a borrower to secure a loan, serving as a guarantee for the lender that the loan will be repaid.

Liquidation Value

The estimated total value of a company's physical assets if it were to be terminated and the assets sold, typically assessed in the context of a business facing bankruptcy.

Diversify Risk

The strategy of spreading investments across various sectors or assets to reduce the overall risk exposure.