If the Fed's Policy Is Contractionary,it Will

question 79

Multiple Choice

If the Fed's policy is contractionary,it will

• A)use open market operations to buy Treasury bills.
• B)use open market operations to sell Treasury bills.
• C)lower the discount rate.
• D)lower the reserve requirement.

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Definitions:

Common Stock

Equity shares issued by a corporation as ownership evidence, granting voting rights and a share in the company's profits.

Dividends Payable

Liabilities on a company's balance sheet representing the amount of dividends declared by the board of directors but not yet paid to shareholders.

Cash Dividend

A payment made by a company out of its earnings to shareholders in the form of cash.

Retained Earnings

is the portion of net income that is not distributed to shareholders as dividends but is kept by the company for reinvestment or debt payment.