As Expansionary Monetary Policy Tools, Quantitative Easing (QE) and Traditional

question 253

Multiple Choice

As expansionary monetary policy tools, quantitative easing (QE) and traditional open-market purchases differ in all of the following, except

• A) the intended effect on the federal funds rate.
• B) securities purchased by the Fed.
• C) the mechanics of how the Fed buys the securities.
• D) the desired goal of shifting aggregate demand.

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Definitions:

Direct Materials

These are the raw materials that are directly incorporated into a finished product.

Standard Cost Card

A document that lists the standard costs associated with producing a single unit of a product, including materials, labor, and overhead.

Fixed Manufacturing Overhead

Expenses related to production that remain constant regardless of output quantity, including lease payments, employee wages, and insurance premiums.

Direct Labor Costs

These are the wages paid to workers who are directly involved in manufacturing or producing a product.