Suppose the Fed Carries Out an Open Market Purchase and Credits

question 67

Multiple Choice

Suppose the Fed carries out an open market purchase and credits the account of a bank by $160,000. Further suppose that RR is 10 percent. By how much is the money supply expected to change?

• A) $160,000
• B) $1.6 million
• C) $16 million
• D) $1.76 million

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Definitions:

Allocated Costs

Allocated costs refer to the systematic distribution of fixed and variable expenses to various departments or sectors of a business.

Responsibility Centers

Parts or segments of an organization for which managers have authority and accountability for performance, often categorized as cost, profit, or investment centers.

Revenue Generation

The process through which a business produces income from its activities, typically through sales of goods or services.

Cost Generation

Relates to the creation or incurrence of costs or expenses in the production of goods or services.