If the Federal Reserve Conducts Open Market Sales,the Money Supply

question 89

Multiple Choice

If the Federal Reserve conducts open market sales,the money supply ________,shifting the LM curve to the ________,everything else held constant.

• A)decreases;right
• B)decreases;left
• C)increases;right
• D)increases;left

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Definitions:

Receivables Turnover Ratio

A financial metric that measures how efficiently a company collects cash from credit customers.

Sales Returns

Goods returned by customers to the seller after the sale has occurred, typically due to defects or dissatisfaction.

Allowances

Reductions or adjustments to the carrying amount of assets or the amount of a liability, often related to accounts receivable or inventory to reflect possible uncollectibility or diminution in value.

Deposits in Transit

Deposits in Transit are amounts that have been received and recorded by a business but not yet reflected in its bank statement.