Before the fiNancial Crisis of 2008, If the Fed Wanted

question 12

Multiple Choice

Before the financial crisis of 2008, if the Fed wanted to lower the Federal funds rate, it

• A) increased the discount rate.
• B) increased the reserve ratio.
• C) bought bonds from banks and the public.
• D) sold bonds to banks and the public.

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Definitions:

Predetermined Overhead Rate

A calculated rate used to apply overhead costs to products or job orders, based on estimated costs and activity levels.

Predetermined Overhead Rates

Rates used to allocate manufacturing overhead costs to products, typically based on estimated costs and activity levels at the beginning of a period.

Direct Labor Cost

The total cost associated with employing workers who directly manufacture products or perform services, including wages and other benefits.

Overhead Applied

The process of allocating estimated overhead costs to individual products or job orders based on a predetermined rate or method.