An Open-Market Purchase of T-Bonds by the Fed Causes the Money

question 27

Multiple Choice

An open-market purchase of T-bonds by the Fed causes the money supply to

• A)fall and bond prices to fall.
• B)rise and bond prices to fall.
• C)rise and bond prices to rise.
• D)fall and bond prices to rise.

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Definitions:

Direct Write-Off Method

An accounting practice where specific bad debts are written off against income at the time they are deemed to be uncollectable.

Generally Accepted Accounting Principles

Generally Accepted Accounting Principles (GAAP) are a set of rules, standards, and procedures established for accounting and financial reporting, aimed at ensuring consistency and transparency.

Factoring

A financial transaction in which a business sells its accounts receivable (invoices) to a third party (factor) at a discount, to obtain immediate cash.

Direct Write-Off Method

An accounting method where bad debts are written off as an expense only when they are deemed to be uncollectable.