If the Federal Funds Rate Were Above the Level the Federal

question 75

Multiple Choice

If the federal funds rate were above the level the Federal Reserve had targeted,the Fed could move the rate back towards its target by

• A)buying bonds.This buying would increase the money supply.
• B)buying bonds.This buying would reduce the money supply.
• C)selling bonds.This selling would increase the money supply.
• D)selling bonds.This selling would reduce the money supply.

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services in manufacturing.

Direct Labor

The wages and benefits paid to workers who are directly involved in the production of goods or services.

Prime Costs

The combined costs of direct materials and direct labor that are directly involved in the production of goods.

Direct Materials Costs

Costs that are directly traceable to the production of specific goods or services, such as raw materials used.