The Fed Raises the Interest Rate When It

question 45

Multiple Choice

The Fed raises the interest rate when it

• A)wants to encourage bank lending.
• B)fears recession.
• C)fears inflation.
• D)wants to increase the quantity of money.
• E)cannot change the quantity of money.

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Definitions:

Ending Inventory

Ending Inventory refers to the total value of goods available for sale at the end of an accounting period, calculated as the sum of beginning inventory plus purchases minus cost of goods sold.

LIFO Method

"Last In, First Out" an inventory costing method that assumes the most recently purchased items are sold first, affecting the cost of goods sold and ending inventory valuations.

Increasing Prices

A situation where the cost of goods or services rises over a period of time, often due to factors like inflation or increased demand.

Income Tax Expense

The cost incurred by businesses or individuals due to the taxes on their income.