Because the Fed's Current Tool for Changing the Interest Rate

question 114

Multiple Choice

Because the Fed's current tool for changing the interest rate is to change the ________, once the decision has been made to make the change, ________.

• A) rate it pays on bank reserves; the implementation lag is usually very long
• B) rate it pays on bank reserves; there is in effect no implementation lag
• C) required reserve rate; the implementation lag is usually very long
• D) required reserve rate; there is in effect no implementation lag

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