Which of the Following Are Policy Instruments Available to the Fed

question 120

Multiple Choice

Which of the following are policy instruments available to the Fed as it tries to achieve its macroeconomic goals?
I. government expenditures on goods and services and taxes
II. the government budget deficit or surplus
III. changes in the federal funds rate

• A) III only
• B) II and III
• C) II only
• D) I and II

---

Definitions:

Coupon Rate

The annual yield paid on a bond, indicated as a percentage of its principal amount.

All Equity Firm

A business that is financed entirely through equity capital, having no debt components in its capital structure.

Capital Structure

The combination of a company's long-term debt, specific short-term debt, common equity, and preferred equity, constituting how a firm finances its overall operations and growth.

Coupon Rate

The interest rate stated on a bond when issued, which represents the annual interest payment as a percentage of the bond's face value.