Which of the Following Statements Is True of Open-Market Operations

question 82

Multiple Choice

Which of the following statements is true of open-market operations?

• A)Open-market operations involve clearing checks.
• B)Open-market operations involve lending money to member banks.
• C)Open-market operations involve accepting deposits from member banks.
• D)Open-market operations involve the Fed's purchase and sale of government securities.
• E)Open-market operations involve the Fed's purchase and sale of foreign exchange.

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Definitions:

After-Tax Cash Flow

The amount of cash a company has left after it has paid taxes, often used to determine a project's or investment's viability.

Capital Asset

A long-term asset that is significant in value and is used for operations, not easily converted to cash, and often depreciates over time.

Tax Rate

The tax rate is the percentage at which an individual or corporation is taxed, which can vary depending on income level, type of income, or jurisdiction.

Present Value

The contemporary valuation of a future sum of money or sequence of cash inflows, considering a certain rate of return.