When the Fed Increases the Discount Rate, It

question 79

Multiple Choice

When the Fed increases the discount rate, it:

• A) increases the reserve to deposit ratio (rr).
• B) decreases the reserve to deposit ratio (rr).
• C) is likely to increase the monetary base (B)
• D) is likely to decrease the monetary base (B).

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Definitions:

Attributions

Explanations for the reasons behind people’s behavior.

Causality

The relationship between a cause and its effect, or understanding why things happen and the consequences that follow.

Inferences

are conclusions or judgments based on evidence and reasoning rather than explicit statements.

Collectivistic Culture

A societal framework that emphasizes the group over the individual, fostering strong ties between individuals and prioritizing group goals over personal achievements.