Which of the Following Have the Same Impact on the Fed's

question 105

Multiple Choice

Which of the following have the same impact on the Fed's balance sheet?

• A) An open market purchase and an increase in loans by the Fed to banks
• B) An open market sale and an increase in foreign exchange reserves
• C) An open market purchase and a decrease in foreign exchange reserves
• D) An increase in loans by the Fed to banks and a decrease in foreign exchange reserves

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Definitions:

Deferred Tax Asset

A financial item on a company's balance sheet representing taxes paid or carried forward that can be used to offset future tax liabilities.

Tax-Exempt Municipal

Refers to income earned from municipal bonds that is exempt from federal income tax and, in many cases, state and local taxes.

Pretax Financial Income

The amount of income a company has earned before any taxes have been deducted, often used for internal reporting.

Taxable Income

The amount of an individual's or entity's income used to determine how much tax is owed, calculated by deducting allowable deductions from gross income.