In Order to Manipulate the Money Supply, the Fed Can

question 7

Multiple Choice

In order to manipulate the money supply, the Fed can change the interest rate that it pays on reserves in comparison to the ____ rate.

• A)federal funds
• B)prime
• C)30-year fixed mortgage
• D)credit card interest

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Definitions:

Extinction

The process by which a species, genus, or family ceases to exist.

Instrumental Conditioning

A training method whereby a behavior's intensity is altered through either positive reinforcement or negative punishment.

Startled

The act of experiencing a sudden, involuntary reaction to an unexpected event or stimulus, often involving physical movement.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response which is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.