In order to move the federal funds rate to the level it desires, the Fed must
A) first change the discount rate to the desired federal funds rate.
B) specify the interest rate on previously issued government bonds.
C) adjust the money supply to achieve the target federal funds rate.
D) limit the amount of bank lending activity.
Ans: C) adjust the money supply to achieve the target federal funds rate.
You might also like to view...
Nominal GDP increases
A) only if total production increases. B) only if prices increase. C) if either prices and/or total production increase. D) only if the productivity of resources increase. E) only if depreciation decreases.
Robert Higgs argued that ________ best explained the growth of "Leviathan" (Big Government)
a. crises that changed fundamental ideologies b. urbanization c. the decline in organized religion as a provider of aid and relief for the poor d. expansion of the right to vote