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1.) Which interest rate is targeted by the Federal Reserve? Question 11 options: Discount rate Prime...

1.) Which interest rate is targeted by the Federal Reserve?

Question 11 options:

Discount rate

Prime rate

Federal funds rate

Student loan rate

2.)

When the federal reserve wishes to increase the interest rate, it

sells bonds on the open market

buys bonds on the open market

increases taxes

decreases taxes

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Answer #1

1-federal funds rate is targeted by the federal reserve.

Federal fund rate is the rate at which the banks lends money.

So option C is the correct statement.

2-when the federal reserve wishes to increase the interest rate it sells bond on the open market and it is because if the federal sells the bond it decreases the money supply.

So option A is the correct statement.

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