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MMLU / When the FED lowers the discount rate its intention is to

Problem

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question

When the FED lowers the discount rate its intention is to

choices

  1. give depository institutions a break on their borrowings.
  2. signal participants in financial markets that a recession is coming.
  3. signal participants in financial markets that an inflationary period is coming.
  4. encourage borrowing by depository institutions so that the money supply may expand.

subject

high_school_macroeconomics

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Source and history

Official source

initial import