The Fed can change the federal funds rate by issuing an order, but it cannot change the discount rate this way
Indicate whether the statement is true or false
False
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Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency rises. c. The GDP Price Index falls, and nominal value of the domestic currency remains the same. d. The GDP Price Index rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following is an example of a seller?
a. Abrams, Kent, and Wallace, Ltd. provide legal services. b. Charles obtains a part for his automobile. c. Optics, Inc. updates their lens-making equipment. d. Solar, Ltd. hires a top salesperson for its new line of products.
Empirical research seems to verify that:
A. the rate of inflation seems to vary directly with the amount of central bank independence. B. countries that have high rates of inflation seem to have central banks with low levels of independence. C. there is no relationship between the independence of central banks and rates of inflation. D. countries that have less independent central banks experience lower rates of inflation.
If opportunity costs are constant, then
A. factors of production must not be fully employed. B. the production possibilities curve is a negatively sloped straight line. C. the production possibilities curve bows outward. D. the production possibilities curve does not exist.