Suppose the Fed Forecasts a Reduction in Cash Leakages

question 170

Multiple Choice

Suppose the Fed forecasts a reduction in cash leakages.It might offset the effect of this on the money supply by

• A) buying government securities.
• B) selling government securities.
• C) lowering the required reserve ratio.
• D) lowering the discount rate.

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Definitions:

Estimated Residual Value

The anticipated value of an asset at the end of its useful life.

Obsolescence

The process through which a product or technology becomes outdated and no longer used, often due to advancements or changes in consumer preferences.

Depletion

An accounting method used to allocate the cost of extracting natural resources, such as minerals or timber, from the earth, reflecting the consumption of the resource over time.

Expense Account

An account used in accounting to record costs or expenses incurred by a business or individual for operational purposes.