If the Federal Funds Rate Rises Above the Targeted Rate

question 26

Multiple Choice

If the federal funds rate rises above the targeted rate, the Trading Desk ____ the amount of reserves available to depository institutions in order to bring the fed funds rate back to the targeted level.

• A)reverses
• B)increases
• C)decreases
• D)leaves the same

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Definitions:

Overhead Costs

Expenses not directly tied to the production of goods or services, like rent, utilities, and administrative costs.

Allocation Method

A procedure used in accounting or budgeting to distribute costs or revenues among various accounts or departments based on predetermined criteria.

ABC Perspective

An ABC Perspective generally refers to viewing activities based on Activity-Based Costing, focusing on managing activities as the route to optimizing costs and improving business operations.

Costs Incurred

Expenses that a company has recognized, reflecting economic value that has been consumed or used up.