International Financial Transactions Are Most Likely to Affect the U

question 107

Multiple Choice

International financial transactions are most likely to affect the U.S.monetary base when

• A) the United States is in recession.
• B) the United States is experiencing a severe inflation.
• C) the Fed tries to influence the foreign-exchange value of the dollar.
• D) interest rates in the United States are highly variable.

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Definitions:

Dealer

An individual or firm in the financial markets that stands ready to buy or sell securities for their own account, at their own risk.

Security

A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship with governmental body or a corporation (bond), or rights to ownership as represented by an option.

Income Bonds

Bonds that pay interest only when the issuer has sufficient earnings, making them riskier than regular bonds that guarantee interest payments.

Rating

A rating refers to an evaluation or assessment of something's quality, quantity, or a combination thereof, often used in financial contexts to gauge the creditworthiness of entities.