The Primary Tool the Federal Reserve Uses to Increase the Money

question 269

Multiple Choice

The primary tool the Federal Reserve uses to increase the money supply is

• A)printing more money.
• B)lowering the required reserve ratio.
• C)buying Treasury securities.
• D)lowering the discount rate.

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Definitions:

Revaluation

The process of adjusting the book value of an asset or liability to reflect its current fair market value.

Prospective Depreciation

Depreciation calculated from the current period forward, taking into account changes in asset value or estimated useful life.

Economic Benefits

Future returns or advantages from owning an asset or from a transaction.

Property, Plant and Equipment

Tangible assets that are held for use in the production or supply of goods and services, rental to others, or administrative purposes and are expected to be used during more than one financial period.