Which of the Following Tools Is NOT a Policy Tool

question 351

Multiple Choice

Which of the following tools is NOT a policy tool of the Fed?

• A) the tax rate on interest income
• B) last resort loans
• C) open market operations
• D) the reserve ratio

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Definitions:

Average Tax Rate

The proportion of total income that is paid in taxes, calculated by dividing the total amount of taxes paid by the taxpayer’s total income.

Tax Liability

The total amount of tax owed to the government by an individual, corporation, or other entity in a specified tax period.

Form 1040EZ

A simplified tax form for individuals with straightforward financial situations, allowing them to report income and calculate taxes owed.

Taxable Income

The portion of an individual's or corporation's income used to determine how much tax is owed to the government.