An Explanation for the Low Federal Funds Rate in 2003

question 45

Multiple Choice

An explanation for the low federal funds rate in 2003 was:

• A) a fear of deflation.
• B) falling unemployment.
• C) rising inflation.
• D) the decline of the dollar vis-à-vis the euro.
• E) an attempt to boost house sales.

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Definitions:

Intercompany Sale

Transactions that occur between two divisions or subsidiaries within the same parent company, often for the purpose of transferring goods or services.

Pre-tax Gain

Income generated before any taxes have been applied.

Investment Account

An account held at a financial institution that is used for holding and trading investments such as stocks, bonds, and mutual funds.

Equity Method

An accounting technique used to record investments in other companies, where the investment's value is adjusted based on changes in the investee's equity.