The Fed's Use of the Federal Funds Rate as an Operating

question 55

Multiple Choice

The Fed's use of the federal funds rate as an operating target in the 1970s resulted in

• A)countercyclical monetary policy.
• B)too slow growth in M1 throughout the decade.
• C)procyclical monetary policy.
• D)too rapid growth in M1 throughout the decade.

---

Definitions:

Decreases in Current Assets

The reduction in the value or amount of the assets that a company expects to convert into cash within one year.

Decreases in Current Assets

Reductions in the assets that a company expects to convert into cash, sell, or consume within one year or the operating cycle, whichever is longer.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions and changes in working capital to find net cash provided by operating activities.

Net Cash Flows

The difference between a company's cash inflows and outflows within a specific period.