Which One of the Following Actions Taken by the Central

question 99

Multiple Choice

Which one of the following actions taken by the central bank would NOT reduce the country's money supply?

• A) Raise the discount rate.
• B) Raise the reserve requirement.
• C) Buy bonds on the open market.
• D) Raise the interest rate that the Federal Reserve pays banks on their deposits at the Fed.

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Definitions:

Selling

The process of promoting and selling goods or services, including marketing and advertising strategies.

Administrative Expense

Expenses incurred in the process of running a company that are not directly tied to a specific product or service, such as salaries of senior executives.

Responsibility Accounting

A system of accountability in which managers are held responsible for those items of revenue and cost—and only those items—over which they can exert significant control. The managers are held responsible for differences between budgeted and actual results.

Significant Variances

Discrepancies between planned and actual figures that are large enough to warrant attention and possibly corrective action by management.