Use the Following to Answer Questions

question 92

Multiple Choice

Use the following to answer questions:
Figure: Changes in the Money Supply
-(Figure: Changes in the Money Supply) Look at the figure Changes in the Money Supply. Federal Reserve policy to increase the supply of money, hence to lower the interest rate from 6% to 4%, is accomplished by action that _____ the _____ Treasury bills.

• A)lowers; price of
• B)increases; interest rate on
• C)increases; demand for
• D)increases; supply of

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Definitions:

Expected Return

Expected return is the anticipated amount of profit or loss an investment is predicted to generate, accounting for the probability of different outcomes.

Financial Plan

Document that specifies the funds needed by a company for a period of time, the timing of inflows and outflows, and the most appropriate sources and uses of funds.

Inflows

The movement of resources, such as money or goods, into a system, organization, or area.

Outflows

The movement of money out of a business or financial account, typically relating to expenses or investments.