If the Fed Wanted to Reduce the Federal Funds Interest

question 15

Multiple Choice

If the Fed wanted to reduce the federal funds interest rate, it might:

• A)increase the discount rate.
• B)increase the required reserve ratio
• C)buy government securities
• D)sell government securities.
• E)pay higher interest on banks' reserves

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Definitions:

Inside Information

Privileged, non-public information that could provide an unfair advantage in financial trading or decision-making.

Securities Exchange Act

A U.S. law enacted in 1934 to govern the trading of securities, such as stocks and bonds, in order to protect investors and maintain fair and efficient markets.

Securities Act

A U.S. federal law enacted in 1933 that governs the first sale of securities (stocks, bonds) to the public, requiring disclosure and registration.

Public Securities

Public Securities are financial instruments issued by governments or municipalities, such as bonds or notes, that are available for purchase by the public.