Which of the Following Sequence of Events Follows an Open

question 195

Multiple Choice

Which of the following sequence of events follows an open market purchase by the Fed?

• A) r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓
• B) r↑ ⇒ I↑ ⇒ AE↓ ⇒ Y↑
• C) r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑
• D) r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↓

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Definitions:

Holder In Due Course

A person who is a holder of a negotiable instrument who took the instrument for value, in good faith, without notice that it is overdue or has been dishonored or that there is any uncured default with respect to payment of another instrument issued as part of the same series, without notice that the instrument contains an unauthorized signature or has been altered, without notice of any claim of a property or possessory interest in it, and without notice that any party has any defense against it or claim in recoupment to it.

Loan Servicer

A company that manages a loan and performs tasks such as collecting payments from borrowers on behalf of the loan's owner.

Holder In Due Course

A party that has acquired a negotiable instrument in good faith for value and without notice of any defect or claim to it, thus having certain protections.

Indorsed

Refers to the act of signing one's name on the back of a check, contract, or other document to validate it or agree to its terms.