Because the Fed's Ability to Use DNFD in the Implementation

question 29

Multiple Choice

Because the Fed's ability to use DNFD in the implementation of monetary policy is _______, the Fed's control over DNFD is ______ precise than its control over the monetary aggregates.

• A)severely limited, less
• B)severely limited, more
• C)extensive, less
• D)extensive, more

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Definitions:

Gross Profit Ratio

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold; it is calculated by dividing gross profit by net sales.

Ending Inventory

The monetary amount of stock available for purchase at the end of an accounting term, which is the sum of the opening inventory and purchases, less the cost of goods sold.

Retail Inventory Method

An accounting procedure for estimating the final inventory balance of a retailer by using percentages of gross margins based on sales and the cost of goods sold.

Ending Inventory

The sum value of inventory available for purchase at the end of an economic period.