The Fed Engages in Open Market Operations and Sells Government

question 345

Multiple Choice

The Fed engages in open market operations and sells government securities. The result is

• A) lower interest rates.
• B) higher interest rates.
• C) interest rates remain unchanged since there is no reason to think bond prices changed.
• D) uncertain since more information is needed.

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Definitions:

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or project.

Statute of Frauds

Legal regulation requiring certain kinds of contracts to be written and signed to be enforceable.

Anticipatory Agreement

A contract in which the parties acknowledge and accommodate the future performance of an obligation before its due.

Shareholders

People or organizations holding at least one share in a corporation, thus acquiring specific rights and stakes within the business.