Which One of the Following Statements Is Most Correct

question 10

Multiple Choice

Which one of the following statements is most correct?

• A) Any central bank purchase of assets automatically results in an increase in the domestic money supply, while any central bank sale of assets automatically causes the money supply to decline.
• B) Any central bank purchase of assets results in an increase in the domestic money supply, while any central bank sale of assets causes the money supply to decline.
• C) Any central bank purchase of assets automatically results in a decrease in the domestic money supply, while any central bank sale of assets automatically causes the money supply to decline.
• D) Any central bank purchase of assets automatically results in a decrease in the domestic money supply, while any central bank sale of assets automatically causes the money supply to increase.
• E) Any central bank purchase of assets automatically results in an increase in the domestic money supply, while any central bank sale of assets does not necessarily affect the money supply.

---

Definitions:

Goodwill Impairment

An accounting concept that occurs when the carrying value of goodwill exceeds its fair value, indicating that the asset has lost value.

FIFO System

"First In, First Out," an inventory valuation method where goods first added to inventory are the first ones to be sold.

Straight Line Amortization

A method of allocating an asset's cost evenly across its useful life.

Fair Values

An estimate of the market value of an asset or liability based on current market prices or valuations.