What trade-offs does the Fed face, particularly in the short run, in attempting to reach its goals?

A. In attempting to reach high economic growth, the Fed would pursue expansionary monetary policy, but this policy could cause higher unemployment.

B. In attempting to reach high economic growth, the Fed would pursue contractionary monetary policy, but this policy could cause higher unemployment.

C. In attempting to reach high employment, the Fed would pursue expansionary monetary policy, but this policy could cause lower economic growth.

D. In attempting to reach high economic growth or high employment, the Fed would pursue expansionary monetary policy, but this policy could cause higher inflation.

Why would anyone buy a bond with a negative interest rate?

A. Many of the bond purchases were made by individual investors who were wary of investing in higher risk bonds.

B. A lack of availability of corporate bonds.

C. Competing interest rates on bonds and other securities of comparable risk were low.

D. A lack of availability of government bonds.

What caused so many European corporate bonds to have negative interest rates?

A. Inflation rates were consistently increasing.

B. The European Central Bank cut interest rates to negative levels.

C. The European economy was growing at higher than normal rates.

D. Central banks were slowing asset purchases.

To increase the federal funds rate the Fed:

A. raises the interest rate it pays on required reserves.

B. raises the interest rate it pays on excess reserves and the interest rate it offers on reverse purchase agreements.

C. raises the interest rate it offers on reverse purchase agreements.

D. raises the interest rate it pays on excess reserves.