The Federal Reserve Can Use Monetary Policy to

question 148

Multiple Choice

The Federal Reserve can use monetary policy to

• A) change output in the long run, but not the short run.
• B) change output in the short run, but not the long run.
• C) change output in both the short run and the long run.
• D) Monetary policy has no effect on output.

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Definitions:

Factor Purchases

Transactions where a company outsources services or acquires assets, typically involving a third-party, or "factor," to facilitate business operations.

Receivables Collection

The process of managing and collecting payments from customers who have purchased goods or services on credit.

Trust Receipt

A document issued by a bank to a buyer who has obtained a loan to purchase goods, wherein the buyer agrees to hold the goods in trust for the bank until the loan is repaid.

Short-Term Financing

Funding obtained for a period typically less than a year, used to cover immediate financial needs of a business.