If the Interest Rate Is Below a Central Bank's Target

question 71

Multiple Choice

If the interest rate is below a central bank's target, what should the central bank do?

• A) buy bonds to increase the money supply
• B) buy bonds to decrease the money supply
• C) sell bonds to increase the money supply
• D) sell bonds to decrease the money supply

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Definitions:

Molecules

The smallest unit of a chemical compound that can exist, composed of two or more atoms bonded together chemically.

Compound Name

The designation of a chemical substance based on its composition and structure.

Acetals

Chemical compounds formed from the reaction between an aldehyde or ketone and a diol, featuring two ether-like oxygen atoms bonded to the same carbon.

PhLi

Phenyllithium, a strong organolithium reagent used in the formation of carbon-carbon bonds in organic synthesis.