Which Statement Lists Contractionary Policies

question 17

Multiple Choice

Which statement lists contractionary policies?

• A) The Fed sells bonds, lowers the discount rate, and raises the reserve requirements.
• B) The Fed sells bonds, lowers the discount rate, and lowers the reserve requirements.
• C) The Fed purchases bonds, lowers the discount rate, and lowers the reserve requirements.
• D) The Fed sells bonds, raises the discount rate, and raises the reserve requirements.

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Definitions:

Book Value

The value of an asset as it appears on a balance sheet, calculated by subtracting any depreciation or amortization from the asset's original cost.

Available-For-Sale

A classification used in accounting for financial assets, denoting securities that a company plans to sell but not immediately or in the near term.

Vertically Integrated

A strategy where a company expands its operations into different stages of production within the same industry, from raw materials to finished products.

Horizontally Growth

Expansion strategy whereby a company grows by acquiring or merging with firms in the same industry at the same level of the supply chain.