The Monetary Expansion Process from an Open Market Operation Continues

question 530

Multiple Choice

The monetary expansion process from an open market operation continues until

• A) required reserves are eliminated.
• B) the Federal Reserve takes actions to stop the process.
• C) the discount rate is lower than market interest rates.
• D) excess bank reserves are eliminated.

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Definitions:

Operating Lease

A lease agreement that allows a company to use an asset without ownership, where the lessor retains the risks and benefits of ownership.

Finance Lease

A lease agreement in which the lessee assumes substantially all the risks and rewards of ownership, similar to finance purchase.

Lease

A contractual agreement whereby the owner (lessor) of an asset allows another party (lessee) to use the asset in exchange for payment over a specified period.

Bonds Payable

Long-term liabilities representing money owed by a company to bondholders, to be paid back at a future date.