Which of the Following Would Cause the U

question 20

Multiple Choice

Which of the following would cause the U.S. money supply to expand?

• A)A commercial bank using excess reserves to extend a loan to a customer
• B)A commercial bank purchasing U.S. securities from the Fed as an investment
• C)An increase in reserve requirements by the Fed
• D)An increase in the discount rate by the Fed
• E)An increase in the tax rate by the government

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Definitions:

Cash Account

A financial account that records cash transactions, including receipts and payments, showing the cash balance available at any given time.

Adjusting Entries

Accounting entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Accounting Errors

Mistakes made in recording financial transactions or preparing financial statements.

Insurance Expense

It refers to the cost attributed to purchasing insurance policies for a business, which is typically considered an operational expense.