An Open Market Purchase by the Fed

question 104

Multiple Choice

An open market purchase by the Fed

• A) increases investment and increases output.
• B) increases investment and decreases output.
• C) decreases investment and increases output.
• D) decreases investment and decreases output.

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Definitions:

Parent Company

A corporation that owns enough voting stock in another firm to control management and operations.

Held-to-Maturity Securities

Investment securities that a company has the intent and ability to hold until a specified maturity date.

Interest Revenue

Income earned from lending investments or depositing funds in interest-bearing accounts, often reported on the income statement.

Held-to-maturity Securities

Held-to-maturity Securities are debt securities that an investor intends and is able to hold until their maturity date, recorded at amortized cost in financial statements.