The Purpose of Open Market Purchases Is To

question 33

Multiple Choice

The purpose of open market purchases is to:

• A)decrease the government budget deficit.
• B)increase the government budget deficit.
• C)increase consumer and investment spending.
• D)decrease consumer and investment spending.

---

Definitions:

Contribution Margin Ratio

A financial metric that measures the proportion of sales revenue that exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Sales

The total amount of revenue a company generates from the sale of goods or services before any expenses are deducted.

Margin of Safety

The difference between actual or expected sales and the break-even point, reflecting the cushion against a loss.

Break Even

Break even refers to the point at which total costs and total revenue are equal, resulting in no net loss or gain and the initial investment is recovered.