Open Market Operations Differ from Discounting Operations in That They

question 103

Multiple Choice

Open market operations differ from discounting operations in that they are

• A) initiated by member depository institutions.
• B) designed to be of significance only to large city banks.
• C) initiated by the Federal Reserve.
• D) initiated by the U.S. Treasury.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or service provision.

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short time.

Variable Costs

Expenses that change in proportion to the activity or production level of a business.

Fixed Costs

Expenses that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and loan payments.