If the Economy Is in a Recession,the Fed Is Likely

question 70

Multiple Choice

If the economy is in a recession,the Fed is likely to:

• A)buy bonds through open market operations.
• B)increase the discount rate.
• C)increase the reserve requirement.
• D)The Fed is likely to do any of these during a recession.

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Definitions:

Contribution Format

A form of income statement that distinguishes costs by classifying them into variable and fixed sections, thereby focusing on the contribution margin.

Contribution Margin Ratio

A ratio that measures the difference between the sales and the variable costs of a product or service, as a percentage of sales.

Cement Manufacturer

A business involved in the production and sale of cement, a key ingredient in concrete.

Margin Of Safety

The difference between the actual or expected profitability of a project and the break-even point, often used as a risk assessment measure.