If the Government Borrows Money from the Federal Reserve

question 98

Multiple Choice

If the government borrows money from the Federal Reserve

• A) the quantity of publicly held bonds will rise.
• B) the quantity of money in circulation will rise.
• C) the quantity of money in circulation will fall.
• D) inflation will decrease.

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Definitions:

Simple Rate

A term not commonly used in a standard context, possibly referring to a basic interest rate in financial terms.

Salvage Value

The estimated resale value of an asset at the end of its useful life, used in calculating depreciation expenses.

Annual Depreciation

The portion of the cost of a fixed asset that is expensed each year over its useful life.

Payback Period

The time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment, used as a measure of the investment's risk and profitability.