In Recent Years,the Federal Reserve Has

question 161

Multiple Choice

In recent years,the Federal Reserve has:

• A) paid closer attention to M1 than M2 in setting monetary targets.
• B) relied more on changes in the discount rate than open-market operations in establishing monetary policy.
• C) has increased M2 at a fixed annual rate,regardless of the health of the economy.
• D) taken an activist,pragmatic approach to monetary policy,paying close attention to interest rates.

Recognize the conditions under which land, buildings, and equipment can or cannot be depreciated for tax purposes.

Grasp the significance of setting bid prices and how it affects the project NPV.

Understand how depreciation and the choice of depreciation method (e.g., CCA) impact project NPV and cash flows.

Analyze initial cash outflows and their components in project valuation.

---

Definitions:

Assets

Economic resources owned or controlled by a business, expected to produce future benefits.

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from total revenue.

Equity

The residual interest in the assets of a business after deducting its liabilities, representing the ownership interest of shareholders.

Assets

Resources owned by a business or individual that have economic value and can be used to meet debts or commitments.