In a Recession, the Fed Usually Sells Short-Term Government Securities

question 67

True/False

In a recession, the Fed usually sells short-term government securities to increase interest rates and decrease spending.

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Definitions:

Pension Reserves

Funds set aside by an organization to meet future pension liabilities for its employees.

Money Market Securities

Short-term financial instruments that are considered relatively safe and liquid, including treasury bills, certificates of deposit, and commercial paper.

Highly Marketable

Describes assets or products that are easily sold or traded in the market due to high demand or liquidity.

Very Low Risk

Investments or financial strategies characterized by minimal potential for financial loss, typically associated with low returns.