All of the Following Statements About Open Market Operations Are

question 36

Multiple Choice

All of the following statements about open market operations are true EXCEPT:

• A) They are used by the Federal Reserve to change the Federal Funds Rate
• B) They are used by the Federal Reserve to change the discount rate
• C) They are used by the Federal Reserve to buy and sell mutual funds
• D) They are used by the Federal Reserve to transact with securities dealers
• E) They are probably the most influential tool the Federal Reserve has to alter money supply

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Definitions:

Accounts Receivable

Outstanding payments from customers to a company for products or services already rendered.

Operating Activity

Refers to the primary revenue-generating activities of an organization, such as sales and service provision.

Direct Method

A cash flow statement reporting approach that lists major operating cash receipts and payments, used to show actual cash flows.

Cash Payments

Cash Payments are transactions where monetary value is transferred from one party to another in the form of cash or its equivalent to settle a debt or purchase a good or service.