The Credit Channel Refers to

question 9

Multiple Choice

The credit channel refers to

• A) changes in bank lending which result from monetary policies
• B) the interest rate linkage between monetary policy and corporate investment
• C) direct lending by the central bank to private banks
• D) money market effects on exchange rates
• E) the relationships among private banks acting cooperatively rather than competitively

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Definitions:

Periodic Inventory System

An accounting method in which inventory levels and cost of goods sold are determined at the end of an accounting period based on a physical count.

Gross Method

An accounting approach that documents purchases at their complete invoice cost without subtracting any offered cash rebates.

Credit Terms

The conditions under which credit will be extended to a customer, including the repayment period, interest rate, and any discounts for early payment.

Gross Margin Ratio

A financial metric expressing the percentage of revenue that exceeds the cost of goods sold, used to assess a company's financial health.