Which of the Following Policy Tools Does the Fed Use

question 86

Multiple Choice

Which of the following policy tools does the Fed use most frequently?

• A)Open market operations
• B)Reserve requirement
• C)Margin requirements
• D)The discount rate

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, based on the estimated overhead costs and estimated activity base, used to allocate overhead costs to products or services.

Direct Labor Costs

Expenses attributed to the payment of employees directly involved in the production of goods or services.

Machine Hours

A measure of the amount of time a machine is operated, used in allocating manufacturing overhead costs.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or services, calculated before the period begins based on estimates of total costs and activity levels.