If the Fed Conducts Open-Market Purchases,then Which of the Following

question 131

Multiple Choice

If the Fed conducts open-market purchases,then which of the following quantities increase(s) ?

• A)interest rates and investment spending
• B)interest rates,but not investment spending
• C)investment spending,but not interest rates
• D)neither interest rates nor investment spending

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Definitions:

Gross Profit

The financial metric calculated by subtracting cost of goods sold from total net sales, reflecting the efficiency of a company in managing its manufacturing costs.

LIFO

LIFO (Last In, First Out) is an inventory costing method where the most recently produced or purchased items are the first to be expensed.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing insight into financial health.

Gross Profit Method

An accounting technique used to estimate inventory levels and cost of goods sold by applying a consistent gross profit percentage to sales figures.