The Fed Can Decrease the Money Supply by Conducting Open-Market

question 8

Multiple Choice

The Fed can decrease the money supply by conducting open-market

• A)sales or by raising the discount rate.
• B)sales or by lowering the discount rate.
• C)purchases or by raising the discount rate.
• D)purchases or by lowering the discount rate.

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Definitions:

Security Interest

A legal claim or right granted by a borrower to a lender over the borrower's assets as collateral for the loan, ensuring repayment security.

Perfected

In legal and finance terms, a status indicating that an interest, often a security interest in property, is formally established and recognized.

Priority

Priority indicates the level of importance or precedence given to an issue, task, or project over others.

Security Interest

A legal claim or lien on assets, which secures the payment of a debt or performance of some other obligation by the property owner.