Which Tool Does the Fed Use Most Often to Change

question 94

Multiple Choice

Which tool does the Fed use most often to change the money supply?

• A) Open market operations
• B) The reserve requirement
• C) The discount window
• D) All of these are used with equal frequency.

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Definitions:

Equity Method

An accounting technique used for recording investments in associate companies where the investment is initially recognized at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets.

Journal Entries

The method by which all business transactions are recorded in a company's accounting system, using debits and credits.

Other Comprehensive Income

Portions of total comprehensive income of a company not realized in net income, including items like foreign currency translation adjustments or unrealized gains on securities.

International Financial Reporting Standards

A set of accounting standards developed by the International Accounting Standards Board (IASB) that aims to standardize accounting practices globally.