Which of the Following Policy Tools Does the Fed Use

question 40

Multiple Choice

Which of the following policy tools does the Fed use most frequently?

• A)open market operations
• B)changes to the reserve requirement
• C)changes to margin requirements
• D)changes to the discount rate

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Definitions:

Deferred Tax Assets

These are amounts of income taxes recoverable in future periods due to deductible temporary differences, carry-forward of unused tax losses, and carry-forward of unused tax credits.

Deferred Tax Liabilities

Future tax payments that result from temporary differences between the accounting and tax bases of assets and liabilities.

Tax Rates

The percentages at which income, sales, or other taxable activities are taxed by governments.

AASB 112

Australian Accounting Standard Board statement number 112, concerning income taxes, requiring entities to account for taxes based on the concept of comprehensive tax balance sheets.