In the Channel System, to Keep the Overnight Rate Above

question 68

Multiple Choice

In the channel system, to keep the overnight rate above the desired minimum, the central bank must sometimes

• A) buy securities.
• B) sell securities.
• C) both of the above.
• D) neither of the above.

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Definitions:

Average Sales Period

The average time it takes for a company to sell its inventory, indicating the efficiency of its sales and inventory management.

Inventory Turnover Ratio

A metric that indicates how often a company's inventory is sold and replaced over a period of time.

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities without relying on the sale of inventory.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.