Which of the Following Would Tend to Increase AD

question 117

Multiple Choice

Which of the following would tend to increase AD?

• A)a commercial bank using excess reserves to extend a loan to a customer
• B)a commercial bank purchasing U.S. securities from the Fed as an investment
• C)an increase in reserve requirements
• D)an increase in the discount rate
• E)a purchase of U.S. government securities by the Fed

---

Definitions:

Direct Labor

The cost associated with the work of employees who are directly involved in the production of goods or services.

Financial Advantage

The position of having superior financial resources or capabilities compared to others, providing a competitive edge.

Fixed Costs

Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.

Annual Financial Advantage

Describes the financial benefit or gain achieved by an entity over the course of a fiscal year, encompassing all revenue streams and savings.