If the Fed Decides to Buy T-Bills, It Increases the Demand

question 82

Multiple Choice

If the Fed decides to buy T-bills, it increases the demand for T-bills.How will this affect the price of T-bills and the interest rate?

• A)T-bill prices fall and interest rates fall.
• B)T-bill prices rise and interest rates rise.
• C)T-bill prices rise and interest rates fall.
• D)T-bill prices fall and interest rates rise.

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Definitions:

Total Manufacturing Costs

Sum of all costs directly involved in the production of goods, including raw materials, direct labor, and manufacturing overhead.

Direct Labor Cost

The wages or expenses directly associated with the workers who are physically involved in creating a product or providing a service.

Actual Overhead

The real costs incurred for overhead in a given period, compared against budgeted or standard overhead costs for variance analysis.

Work in Process Inventory

Goods partially completed during the manufacturing process, not yet ready for sale.