If the FOMC Orders the Sale of T-Bills in the Open

question 81

Multiple Choice

If the FOMC orders the sale of T-bills in the open market, then bank reserves are

• A)decreased, but the money supply will remain unchanged.
• B)decreased, and a multiple contraction of the money supply will occur.
• C)increased, but the money supply will remain unchanged.
• D)increased, and a multiple expansion of the money supply will occur.

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Definitions:

Quantity Standard

A predetermined measure of the quantity of inputs expected to be used in the production of goods or services, used for budgeting and performance evaluation.

Standard Cost System

An accounting system that uses predetermined costs for products and services to help managers control costs by comparing them with actual costs.

Raw Materials

The basic materials and components required to start the production process.

Standard Cost Card

A detailed listing of the standard amounts of inputs and their costs that are required to produce a unit of a specific product.