If the Fed Carries Out an Open Market Operation and Sells

question 65

True/False

If the Fed carries out an open market operation and sells U.S. government securities, the federal funds rate falls and the quantity of money increases.

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Definitions:

Cash Flow

The comprehensive measure of cash flow into and out of a business operation, crucially shaping its financial liquidity.

Depreciation

Allocating the expense of a tangible asset over the period of its use, taking into account its deterioration or outdating.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity and short-term financial health of the business.

Fixed Assets

Enduring assets of a tangible nature employed in business activities, not intended to be liquidated or depleted over the course of a year.