To Decrease the Interest Rate the Federal Reserve Could

question 88

Multiple Choice

To decrease the interest rate the Federal Reserve could

• A)buy bonds.The fall in the interest rate would increase investment spending.
• B)buy bonds.The fall in the interest rate would decrease investment spending.
• C)sell bonds.The fall in the interest rate would increase investment spending
• D)sell bonds.The fall in the interest rate would decrease investment spending.

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Definitions:

Stock Subscription Plan

A mechanism for employees or investors to buy shares of a company's stock, often at a discount.

Paid in Capital

The portion of the shareholders' equity that represents the amount investors have put into the company by purchasing shares directly from the company.

Common Stock

Represents ownership shares in a corporation, providing voting rights and a residual claim on corporate earnings in the form of dividends.

Subscription Receivable-common Stock

An amount due from subscribers for shares in common stock, which has not yet been paid.