If the Fed Wants to Stimulate an Economy,it Will ________

question 153

Multiple Choice

If the Fed wants to stimulate an economy,it will ________.

• A) sell Treasury bonds
• B) lower short-term interest rates
• C) increase the quantity of required reserves
• D) reduce money supply

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Definitions:

Inventory Conversion Period

Inventory Conversion Period is the average time taken for a company to convert its inventory into sales.

Payables Deferral Period

The time duration a company takes to pay off its suppliers after a purchase has been made, indicating how well the company manages its cash outflow.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories, and meeting other short-term liabilities.

Flotation Cost

The expenses incurred when a company issues new securities, including underwriting fees, legal fees, and registration fees.