If the Open-Market Desk at the Fed Sells Securities, the Most

question 35

Multiple Choice

If the Open-Market Desk at the Fed sells securities, the most likely effect is that the

• A)federal funds rate decreases.
• B)primary credit discount rate decreases.
• C)primary credit discount rate increases.
• D)federal funds rate increases.

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Definitions:

Pound Sterlings

The official currency of the United Kingdom, commonly known as the pound and denoted by GBP, which is one of the world's major currencies.

Bonds

Debt securities issued by entities such as governments or corporations to finance projects or operations, with the promise to repay the principal along with interest.

Open Economy

An economy that engages in international exchange of goods, services, and capital by allowing cross-border trade and investment.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a specific time period, used as an indicator of economic health.