Which of the Following Is False

question 29

Multiple Choice

Which of the following is false?

• A)The discount rate is the interest rate the Fed charges depository institutions for borrowing reserves from their district Reserve Bank.
• B)Institutions are encouraged to borrow reserves frequently from the Fed.
• C)To preserve the public's confidence in the safety and soundness of the financial system, the Fed will lend for an extended period to an institution experiencing severe difficulties.
• D)The Fed is the lender of last resort.

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Definitions:

Relevant Range

The span of activity level or volume in which the specific assumptions of cost behavior are considered to be applicable.

Break-Even Point in Units

The point at which sales volumes result in no profit or loss, calculated by dividing fixed costs by the contribution margin per unit.

Unit Fixed Cost

The fixed cost associated with manufacturing one unit of a product, which remains constant regardless of the number of units produced.

Unit Variable Cost

The variable cost associated with producing one unit of product, including materials, labor, and other costs that vary with production volume.