The Fed Can Reduce the Federal Funds Rate by

question 54

Multiple Choice

The Fed can reduce the federal funds rate by

• A)decreasing the money supply. To decrease the money supply it could sell bonds.
• B)decreasing the money supply. To decrease the money supply it could buy bonds.
• C)increasing the money supply. To increase the money supply it could sell bonds.
• D)increasing the money supply. To increase the money supply it could buy bonds.

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Definitions:

Simultaneously

Occurring, operating, or done at the same time.

Centration

A cognitive development term referring to the tendency of children in the preoperational stage to focus on one aspect of a situation while neglecting others.

Piagetian Error

Mistakes made by children that reflect their stage of cognitive development, according to the theories of Jean Piaget; for example, misunderstanding conservation of quantity.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed.