If the Fed Conducts Open-Market Sales,which of the Following Quantities

question 120

Multiple Choice

If the Fed conducts open-market sales,which of the following quantities increase(s) ?

• A)interest rates,prices,and investment spending
• B)interest rates and prices,but not investment spending
• C)interest rates and investment,but not prices
• D)interest rates,but not investment or prices

---

Definitions:

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Variable Production Costs

Costs that vary directly with the level of production output, such as raw materials and direct labor.

Absorption Costing

An accounting method that includes all manufacturing costs, both variable and fixed, in the cost of producing each unit of a product.

Variable Costing

An accounting method that only allocates variable costs to the inventory; fixed manufacturing overhead is expensed as incurred.