Which of the Following Is Not True About the Federal

question 29

Multiple Choice

Which of the following is not true about the Federal Reserve banks?

• A) They serve as bankers' banks
• B) They are privately owned but government-controlled
• C) Unlike other banks, they are not motivated by profits
• D) They compete with commercial banks in their basic functions

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Definitions:

Positive Slope

In a graph, a line that goes up to the right, indicating a positive relationship or increase between two variables.

Liquidity Preference Theory

A theory that suggests interest rates are determined by the supply and demand for money, with people preferring liquidity over committing to long-term investments.

Upward Sloping

A term that describes a line or curve on a graph that shows an increase in a variable in relation to another variable as you move from left to right.

Inverse Relationship

An inverse relationship is a situation in which two variables move in opposite directions; as one increases, the other decreases.