The Primary Cause of the Reduction in the Nominal Money

question 51

Multiple Choice

The primary cause of the reduction in the nominal money supply during the early years of the Great Depression was

• A)the Fed's sale of bonds.
• B)the Fed's purchase of bonds.
• C)a reduction in the money multiplier.
• D)none of the above

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Definitions:

Accounts Payable

Amounts a company owes to its creditors for goods or services that have been delivered or used but not yet paid for.

FOB Shipping Point

This term represents a shipping agreement where the buyer takes responsibility for the goods once they are shipped, implying ownership transfer at the seller's location.

Freight Costs

Costs a company bears to move merchandise from one location to another.

Purchased Merchandise

Goods acquired by a business for the purpose of reselling them to final consumers.