Which of the Following Is an Example of Monetary Policy

question 38

Multiple Choice

Which of the following is an example of monetary policy?

• A)decreasing federal spending-
• B)increasing food and drug regulations
• C)increasing income taxes on wealthy Americans
• D)the Federal Reserve Board buying government bonds

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Definitions:

Profitability Index (PI)

A calculation that determines the relative profitability of an investment, indicating the ratio of payoff to investment amount.

Internal Rate of Return (IRR)

The Internal Rate of Return (IRR) is the rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero, used as a benchmark to decide the profitability of an investment.

Net Present Value (NPV)

NPV is a financial metric used in capital budgeting to assess the profitability of an investment or project, calculated as the difference between the present value of cash inflows and outflows.

Capital Budgeting

The process by which investors or company management evaluate and select long-term investments that are likely to yield positive returns.