Which of the Following Is a Tool That the Federal

question 119

Multiple Choice

Which of the following is a tool that the Federal Reserve can use to influence AD?

• A) open-market operations
• B) lending to banks and other financial institutions
• C) changes in reserve requirements and the interest rate paid on reserves
• D) Each of these answers is correct.

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Definitions:

Operating Activities

Operating activities involve the primary revenue-generating activities of an organization, including production, sales, and delivery of the company’s product as well as administrative and general expenses.

Salaries Expense

The cost incurred by a business to pay its employees for services rendered during a specific period.

Unearned Revenues

Money received by a company for goods or services yet to be delivered or performed, recorded as a liability.

Operating Cash Payments

Cash outflows related to the primary revenue-generating activities of a business, such as payments to suppliers and employees.