1.Which of the following events is likely to lower interest rates in the economy

ID: 1108832 • Letter: 1

Question

1.Which of the following events is likely to lower interest rates in the economy?

Select one:

a. The Fed raising the Required Reserve Ratio

b. The Fed selling government bonds

c. An increase in income tax

d. A high rate of inflation

e. A rise in income

2.Which one of these tasks is a role that the Fed has?

Telling banks what interest rates they must charge on loans

b. Acting as the central bank for state and local governments

c. Targeting the Federal Funds Rate

d. Issuing new government bonds

e. Regulating hedge funds

Ans)

1.
d. A high rate of inflation
All other options will increase the interest rates as they decrease the money.

2.
c. Targeting the Federal Funds Rate

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