Monetary Policy Tools Include

question 33

Multiple Choice

Monetary policy tools include:

• A)Income taxes and the discount rate.
• B)Open market operations and government spending.
• C)The reserve ratio and the discount rate.
• D)Open market operations and deregulation.

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Definitions:

WACC

Weighted Average Cost of Capital - a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

EBIT

Earnings before interest and taxes, a measure of a firm's profitability that excludes interest and income tax expenses.

Financial Leverage

The use of borrowed funds to increase the potential return on investment, amplifying both potential gains and losses.