When the Fed Increases the Federal Funds Rate

question 39

Multiple Choice

When the Fed increases the federal funds rate,

• A)there is no effect on investment because investment depends on the real interest rate.
• B)the real interest rate falls,and investment increases.
• C)the real interest rate rises,and investment decreases.
• D)the real interest rate is unaffected,but investment still decreases.
• E)the real interest rate rises,and investment does not change.

---

Definitions:

Prima Facie Duties

Duties that are considered to be correct or obligatory at first glance, unless overridden by a more compelling moral obligation.

Kantian Ethics

A moral philosophy based on the work of Immanuel Kant, emphasizing duty, rationality, and the categorical imperative.

Inner Moral Worth

The inherent value that an individual possesses, which is deserving of moral respect and consideration.

Duty

A moral or legal obligation; a responsibility one has towards others or society as a whole.