When the Fed Engages in an Overnight Reverse Repo

question 7

Multiple Choice

When the Fed engages in an overnight reverse repo

• A)a bank agrees to hold a certain amount of clearing balances at the Fed.
• B)the fed sells securities and agrees to buy them back in one day.
• C)a primary government securities dealer agrees to sell a security to the Fed one day and buy it back the next day.
• D)The Fed repossesses property that a bank owns as punishment for the bank's failure to pay off a discount loan.

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Definitions:

Job-order Costing

A cost accounting system that assigns manufacturing costs to an individual product or batches of products, ideal for customized orders.

Work in Process

Inventory that includes goods partially completed but not yet ready for sale, situated between raw materials and finished goods.

Direct Labour

The labor costs directly associated with the production of goods, easily traceable to the manufacturing process.

Direct Materials

Fundamental elements that can be directly connected to the manufacturing of a specific item.