If the Fed Wishes to Reduce Aggregate Demand, It Will

question 18

Multiple Choice

If the Fed wishes to reduce aggregate demand, it will conduct an _____ which will _____ bond prices, _____ interest rates, and _____ investment.

• A)open market sale; lower; lower; stimulate
• B)open market purchase; lower; lower; discourage
• C)open market sale; lower; raise; discourage
• D)open market purchase; raise; lower; stimulate

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Definitions:

Purchase Orders

Official documents sent by a buyer to a seller specifying products, quantities, and agreed prices for products or services.

Cash Purchases

Transactions where goods or services are paid for with cash at the point of sale, without utilizing credit.

Inventory Without A Bill

Recording inventory items received before the actual invoice or bill is received to account for stock levels accurately.

Enter The Bill

The process of recording a bill or invoice received from a vendor in the accounting system for tracking and payment purposes.