If the Fed Raises the Discount Rate, What Will Be

question 186

Multiple Choice

If the Fed raises the discount rate, what will be the effect on the money supply?

• A)It will decrease the money supply.
• B)It will increase the money supply.
• C)No change in the money supply
• D)Not enough data to give an answer

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Definitions:

Journal Entry

An accounting record of a business transaction in the accounting books, including information such as the date of the transaction, amounts, accounts affected, and a brief description.

Petty Cash

A small amount of cash on hand used for minor expenses.

Merchandise Inventory

Refers to the goods a company has on hand for the purpose of resale to customers in the normal course of business.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those presented on a bank statement, to ensure they are in agreement and to identify any discrepancies.