Prior to 2008, the Primary Tool Used by the Fed

question 139

Multiple Choice

Prior to 2008, the primary tool used by the Fed to control the money supply was

• A) the manipulation of the required reserve ratio banks must hold against their checking deposits.
• B) the extension of loans to financial institutions.
• C) the buying and selling of stocks and corporate bonds.
• D) the buying and selling of U.S. Treasury securities.

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Definitions:

Standard Cost Card

A detailed listing of the standard amounts of inputs and their costs that are required to produce a unit of a specific product.

Standard Cost System

An accounting system that uses cost estimates for materials, labor, and overhead to control costs and assess operational efficiency.

Fixed Manufacturing Overhead

Payments that remain unchanged no matter the volume of production or sales, including rents, staff remuneration, and insurance agreements.

Work in Process Inventories

Goods that are in the production process but have not yet been completed.