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QUESTION 18 The federal fund rate is the interest rate paid by loans banks take from the Fed. QUESTION 19 The quantitative ca
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(18) The Federal fund rate is the interest rate paid by loans banks take from the other banks not Fed.

Answer: False

(19) Quanitative easing policy implies the purchase of government securities or other securities from the market by the central bank in order to increase the money supply.

Hence, money supply curve shifts right and cause a fall in federal funds rate.

Answer: Option (C).

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