Which of the Following Generally Occurs When a Central Bank

question 17

Multiple Choice

Which of the following generally occurs when a central bank pursues expansionary monetary policy?

• A) The central bank purchases bonds and the interest rate decreases.
• B) The central bank sells bonds and the interest rate increases.
• C) The central bank purchases bonds and the interest rate increases.
• D) The central bank sells bonds and the interest rate decreases.
• E) The central bank purchases reserves and the interest rate decreases.

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Definitions:

Adjusting Journal Entry

An accounting record entered at the closing of a financial period to distribute profits and losses to the correct period.

Five-Day Week

A work schedule that typically consists of five eight-hour days, totaling 40 hours, usually from Monday to Friday.

Biweekly Salaries

Salaries that are paid every two weeks, totaling 26 payments over the course of a year.

Payday

Payday refers to the specific day on which an employer distributes wages or salaries to employees.