The Fed Can Increase the Federal Funds Rate by

question 115

Multiple Choice

The Fed can increase the federal funds rate by

• A)selling Treasury bills,which increases bank reserves.
• B)buying Treasury bills,which increases bank reserves.
• C)selling Treasury bills,which decreases bank reserves.
• D)buying Treasury bills,which decreases bank reserves.

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Definitions:

Relevant Range

The range of activity within which the assumptions about fixed and variable costs in cost-volume-profit analysis are valid.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Contribution Margin

The difference between sales revenue and variable costs, representing the amount that contributes towards covering fixed costs and generating profit.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, used in financial analysis and grading.