If the Fed Raises Its Target for the Federal Fund

question 191

Multiple Choice

If the Fed raises its target for the federal fund rate,this indicates that

• A)the Fed is pursuing an expansionary monetary policy.
• B)the Fed is pursuing a contractionary monetary policy.
• C)the Fed is attempting to combat deflation.
• D)The Fed is concerned that the growth in aggregate demand is too slow to keep up with potential GDP.

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Definitions:

Direct Labor

Labor costs that can be identified with a specific product or service.

Sales Variance

Captures the effect of quantity sold holding the mix of products sold constant.

Overhead Variances

The difference between actual overhead costs incurred and the standard or budgeted overhead costs.