Which of the Following Does the Federal Reserve Not Do

question 37

Multiple Choice

Which of the following does the Federal Reserve not do?

• A)It controls the supply of money.
• B)It acts as a lender of last resort to banks.
• C)It makes loans to any qualified business that requests one.
• D)It tries to ensure the health of the banking system.

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Definitions:

Fixed Costs

Costs that remain consistent for a company irrespective of how much goods or services it produces.

Financial Leverage

Financial leverage is the use of borrowed funds to increase the potential return of an investment.

Breakeven Analysis

A financial calculation to determine the point at which revenue and expenses are equal, resulting in no net loss or gain.

Financial Leverage

The use of borrowed funds to finance the purchase of assets with the expectation that the income or capital gain from the new assets will exceed the cost of borrowing.