If the Fed Wants to Decrease the Quantity of Money

question 7

Multiple Choice

If the Fed wants to decrease the quantity of money, it can

• A) decrease the government budget deficit.
• B) sell U.S. government securities.
• C) raise income tax rates.
• D) purchase U.S. government securities.

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Definitions:

Inventory Method

A strategy used by businesses to value and manage their inventory, affecting how costs are recorded and profits calculated.

Weighted-Average

A mathematical average that takes into account the varying degrees of importance of the numbers in a data set.

Ending Inventory

The total value of all unsold goods that a company has in its possession at the end of an accounting period.

Periodic Inventory

An inventory accounting system where inventory levels and cost of goods sold are determined at the end of an accounting period.