Suppose the Fed Purchases Treasury Securities

question 8

Multiple Choice

Suppose the Fed purchases Treasury Securities.Interest rates in the United States will ________ and the U.S.dollar will ________ against foreign currencies.

• A)decrease; appreciate
• B)decrease; depreciate
• C)increase; depreciate
• D)increase; appreciate

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, used to measure its short-term financial health and operational efficiency.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle if longer.

Current Liabilities

Financial obligations of a business that are due and payable within one year, including accounts payable, short-term loans, and other short-term debts.

Common-size Percent

A financial analysis tool that converts income statement items into percentage of revenue, facilitating trend analysis and comparison.