Which of the Following Is True

question 14

Multiple Choice

Which of the following is true?

• A)The multiplier is under the Fed's direct control and is fairly stable or predictable, especially in the short run.
• B)If the Fed can control the supply of reserves in the banking system, it can precisely control the money supply in the short run.
• C)Over the longer run (3-6 months), as the fluctuations in the multiplier tend to offset one another, the Fed's ability to predict the multiplier, and thus control the money supply, improves considerably.
• D)When excess reserves are taken into consideration, the multiplier increases.

Identify and apply the correct formats for various types of business communications, including requests for information, routine claims, and adjustment messages.

Recognize the value of clear, concise, and effective communication in maintaining and enhancing business relationships.

Distinguish between inductive and deductive message structures and their appropriate use in business contexts.

Analyze the components and effectiveness of routine business requests and responses.

---

Definitions:

Coupon Rate

A bond's annual return rate, expressed as a portion of its nominal value.

Comparable Bonds

Bonds that are similar in terms of interest rate, maturity, and credit quality, used as a benchmark to evaluate the value of other bonds.

Market Interest Rate

The market interest rate is the rate of interest that is commonly charged or paid on loans and bonds in the current market.

Coupon Rate

The interest rate paid by a bond issuer on the bond's face value, determining the periodic interest payments to bondholders.