If the Fed Uses the Federal Funds Rate as an Interest

question 16

Multiple Choice

If the Fed uses the federal funds rate as an interest rate target,fluctuations in the reserves demand curve will cause ________ to fluctuate.

• A) nonborrowed reserves
• B) the federal funds interest rate
• C) Treasury bill interest rates
• D) the inflation rate

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Definitions:

Direct Material

Raw materials that can be directly attributed to the production of specific goods or services, utilized in their creation.

Direct Labour Cost

A cost that can be directly attributed to the production of specific goods or services, such as wages paid to employees who physically produce a product.

Overhead Applied

The portion of indirect costs allocated to a specific product or department within a company, based on a predetermined overhead rate.

Cost of Goods Sold

The immediate expenses linked to the creation of products sold by a business, encompassing both materials and labor costs.