Which of the Following Actions by the Fed Most Likely

question 88

Multiple Choice

Which of the following actions by the Fed most likely increase commercial bank lending?

• A) raising the reserve ratio
• B) increasing the federal funds rate target
• C) reducing the interest paid on excess reserves held at the Fed
• D) selling bonds to commercial banks and the public

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Definitions:

Work-in-Process Inventory

Work-in-process inventory includes all the materials, labor, and overhead costs for products that are in the production process but are not yet complete.

Labor Distribution Report

A report issued by the payroll department to categorize all the types of labor incurred during the week.

Manufacturing Overhead-Applied

Refers to the allocation of all indirect costs of production to the products manufactured.

Manufacturing Overhead-Control

An account that tracks the costs associated with the manufacturing process that are not directly tied to the production of goods, such as utilities and manager salaries.