Use the Following to Answer Questions

question 162

Multiple Choice

Use the following to answer questions .
Exhibit: Effects of Monetary Policy
-(Exhibit: Effects of Monetary Policy) Which of the following actions by the Fed could have caused the movement from AD₁ to AD₂ in Panel (a) ?

• A) selling government bonds in the open market
• B) buying government bonds in the open market
• C) increasing the discount rate
• D) increasing the federal funds rate

---

Definitions:

Recognition Differences

Discrepancies that occur when financial transactions are recognized at different times or amounts in financial statements.

Financial Reporting

Financial reporting involves the disclosure of financial information to the various stakeholders about the financial performance and position of an organization over a specific period.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) for global use.

U.S. GAAP

Generally Accepted Accounting Principles in the United States, which are a set of accounting standards used for financial reporting.