True or False: 1. If the Fed raises the discount rate, the money supply will tend to

Question:

True or False:
1. If the Fed raises the the money supply will tend to increase.
2. The is a relatively unimportant monetary policy tool, mainly because member banks do not rely heavily on the Fed for borrowed funds.
3. The discount rate's main significance is that changes in the rate signal the Fed's intentions with respect to monetary policy.
4. Currently, the Fed sets the below the federal funds target.
5. The Fed funds rate target tends to affect interest rates throughout the economy.
6. Setting the above the Fed funds target tends to discourage borrowing from the Fed's discount window.
7. If the Fed wanted to increase the money supply, it would buy bonds, lower reserve requirements, or lower the When interest rates are lower, the of holding monetary assets is higher.

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...