Refer to the Information Provided in Table 7

question 205

Multiple Choice

Refer to the information provided in Table 7.5 below to answer the questions that follow.
Table 7.5
-Refer to Table 7.5. If 2015 is the base year, the inflation rate between 2014 and 2016 is

• A) 4.0%.
• B) 5.8%.
• C) 6.2%.
• D) 9.4%.

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Definitions:

Excess Reserves

Funds that banks hold over and above the required minimum by the central bank to cover depositor withdrawals.

Open Market Operations

Actions undertaken by a central bank, such as buying or selling government securities, to control the money supply and interest rates.

Federal Reserve District Banks

The 12 regional banks that make up the Federal Reserve System of the United States, each serving a specific geographic area.

Securities

Financial instruments that represent an ownership position in publicly-traded corporations (stocks), a creditor relationship with a governmental body or a corporation (bonds), or rights to ownership as represented by an option.