Which of the Following Is an Approach Used by the Fed

question 20

Multiple Choice

Which of the following is an approach used by the Fed to lessen the likelihood of inflation?

• A)Lower the reserve requirement for banks so they can loan out more money.
• B)Raise the discount rate charged to banks that borrow funds from the Fed.
• C)Buy bonds on the open market to increase the amount of money banks have to lend.
• D)Lower the federal funds rate charged to banks who want to borrow from other banks.

Analyze the effects of minimum wage laws on employment, wage rates, and the labor market.

Comprehend the impact of restrictive labor supply and demand strategies by unions and their consequences.

Identify the role and outcomes of legislative and non-legislative factors affecting labor markets such as minimum wage and occupational licensing.

Understand the relationship between wage differentials and factors such as human capital, job characteristics, and labor market competitiveness.

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Definitions:

Earnings Per Share

A financial metric that measures the profitability of a company on a per-share basis, calculated by dividing the company's net income by the number of outstanding shares.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue, often referred to as the bottom line.

Interest Expense

The cost incurred by an entity for borrowed funds, often represented as an annual percentage rate of the principal.

Current Ratio

The current ratio is a liquidity metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.