When the Federal Reserve System Was First Established, Its Founders

question 183

Multiple Choice

When the Federal Reserve System was first established, its founders intended the Fed to

• A)assist the Treasury in collecting taxes.
• B)be primarily responsible for government regulations.
• C)pursue an active monetary policy to stabilize the economy.
• D)provide protection against financial panics by acting as the lender of last resort.

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Definitions:

Working Capital Policy

A strategic approach to managing a company's short-term assets and liabilities to ensure it has sufficient liquidity to meet its short-term obligations.

Temporary Financing

Short-term loans or credit facilities intended to provide immediate liquidity or cover a short-term funding gap until long-term financing can be arranged.

Short-Term Assets

Assets expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Aggressive Working Capital Policy

A strategy emphasizing minimal cash and inventory levels and maximizing short-term liabilities to fund operations and investments.