Which of the Following Tools Is Used Most Often by the Fed

question 60

Multiple Choice

Which of the following tools is used most often by the Fed to change the supply of money?

• A) Open market operations
• B) Reserve requirement
• C) Discount window
• D) Interest rate

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Definitions:

Output

The total amount of goods or services produced by a company, industry, or economy.

Marginal Product

The additional output gained by adding one more unit of a specific input, while keeping other inputs constant.

Total Output

The total value of all goods and services produced in an economy over a specific time period.

Average Total Cost

The total cost of production divided by the quantity produced, incorporating both fixed and variable costs.