Recall the Application About How the Fed Kept the U

question 21

Multiple Choice

Recall the Application about how the Fed kept the U.S. financial system in operation following the attacks of September 11, 2001, to answer the following question(s) . To help prevent financial firms from defaulting on their debts, the Fed took several steps to provide additional funds to the financial system, including allowing banks to borrow more, increasing the difference between the credits and debits it extended while serving as a clearinghouse for checks, purchasing government securities, and providing dollars to foreign central banks. Together, these actions increased the credit extended by the Fed by over $90 billion.
-According to this Application, following the attacks of September 11, 2001, the Federal Reserve purchased government securities, putting $30 billion in the hands of private citizens and their banks. By extending cash to banks during the potential financial crisis following the September 11 attacks, the Fed was attempting to

• A) fend off a financial panic.
• B) decrease the federal deficit.
• C) reduce potential inflation.
• D) decrease net exports.

---

Definitions:

Plantwide Overhead Allocation

A method of distributing overhead costs to all products or services based on a single cost driver across the entire plant or factory.

Production Activities Levels

Refers to the volume or intensity of production activities, which can vary based on demand and capacity, affecting costs and operational efficiency.

ABC Overhead Allocation

Stands for Activity-Based Costing Overhead Allocation, a method that assigns overhead costs to products based on the activities they require, ensuring more accurate product costing.

Plantwide Overhead Rate Method

A costing method that applies a single overhead rate to all units of production within a facility, regardless of the department in which they were produced.