An Inflation Target Is

question 102

Multiple Choice

An inflation target is

• A)the difference between the current federal funds rate and the current real interest rate.
• B)what the rate of inflation equals when the real interest rate equals zero.
• C)what the rate of inflation equals when the nominal interest rate equals zero.
• D)the rate of inflation the central bank tries to maintain, on average, over the long run.
• E)what the rate of inflation equals when the real and nominal interest rates equal each other.

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Definitions:

Petty Cash Fund

is a small amount of cash kept on hand by a business for making immediate and minor payments, reducing the need for check transactions.

Journalize

The process of recording business transactions in a journal, the first step in the accounting cycle.

Replenishment

The process of refilling inventory levels to ensure sufficient stock is available for future sales or production demands.

Bank Reconciliation

The process of comparing and contrasting the bank statement with a company's financial records to identify any discrepancies.