The Reason for the Fed Being Set Up as an Independent

question 20

Multiple Choice

The reason for the Fed being set up as an independent agency of government is to

• A)protect it from political pressure.
• B)allow it to earn profits like private firms.
• C)make it be managed and controlled by member banks.
• D)let it be able to compete with other financial institutions.

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Definitions:

Short-Term Customer Relationship

A business strategy focusing on quick and immediate sales with little emphasis on building long-term customer loyalty.

Customer Level Operating Profit

Customer Level Operating Profit refers to the profit earned from a customer, after deducting operating expenses directly associated with serving that customer.

Length of Customer Relationship

The duration over which a business maintains a relationship with an individual customer, significant for understanding customer loyalty and value.

Economies of Scale

Economies of scale are cost advantages that businesses obtain due to scale of operation, with costs per unit of output decreasing with increasing scale.