Which of the Following Is a Tool Used by the Fed

question 101

Multiple Choice

Which of the following is a tool used by the Fed in the conduct of monetary policy?

• A) changes in the prime rate
• B) issuing new government bonds and retiring old ones
• C) buying and selling corporate bonds
• D) buying and selling federal government bonds

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Definitions:

Unit Tax

A fixed amount of tax imposed on a product or service, regardless of its price.

Total Costs

The combined amount of all the costs associated with the production of goods or services, including both fixed and variable costs.

Output

The quantity of products or services produced by a company, a sector, or an economy within a specified period.

Profit

The profit made when the income from a business operation surpasses the expenditures, costs, and taxes required to maintain that operation.