In Late 1998 the Fed Averted a Possible Financial Panic

question 2

Multiple Choice

In late 1998 the Fed averted a possible financial panic by

• A)lowering interest rates.
• B)raising interest rates.
• C)using its influence to bring together the creditors of Long-Term Capital Management.
• D)using its influence to encourage banks to make loans to broker-dealers in the securities industry.

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Definitions:

Merchandise Inventory

Goods and products that a retailer, wholesaler, or distributor has on hand to sell to customers.

Purchases

In accounting, refers to the acquiring of goods or services that are necessary for the operation of a business or for resale.

Cost Of Merchandise Sold

The total cost of acquiring or manufacturing the goods that were sold to customers during a period.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, preparing the books for the next period.