The Combination of a Decrease in the Discount Rate and Decrease

question 19

Multiple Choice

The combination of a decrease in the discount rate and decrease in the required reserve ratio will tend to result in:

• A)a lower loan volume issued by the commercial banking system.
• B)lower bond prices.
• C)increased unemployment in the short run.
• D)a decrease in investment.
• E)none of the above.

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Definitions:

Salaried Manager

An employee who receives a fixed amount of compensation from an employer, typically on a monthly or yearly basis, regardless of the number of hours worked.

Risk

The exposure to the possibility of loss or damage as a result of a given action, decision, or event.

Franchisee

An individual or company that acquires the rights from a franchisor to operate a business under the franchisor's brand and system.

Salaried Manager

An individual in a managerial position who receives a predetermined, regular payment, typically on a monthly or bi-weekly basis, regardless of hours worked.