The Fed Raises the Federal Funds Rate When It

question 218

Multiple Choice

The Fed raises the federal funds rate when it

• A)fears inflation.
• B)wants to increase the quantity of money.
• C)fears recession.
• D)wants to encourage bank lending.
• E)cannot change the quantity of money.

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Definitions:

Entrepreneurial Ability

The imagination required to develop a new product or process, the skill needed to organize production, and the willingness to take the risk of profit or loss

Natural Resources

Assets derived from the earth such as minerals, forests, water, and fertile land that can be used for economic gain.

Scarce

A condition where resources are limited in availability and cannot fully meet the unlimited wants of people.

Zero Price

A situation where goods or services are offered for free, without a monetary exchange, often used in promotional contexts or digital offerings.