The Actions of the Fed

question 205

Multiple Choice

The actions of the Fed

• A)must be approved by the president and the Congress
• B)must be approved by the president alone
• C)must be approved by the Congress alone
• D)are not subject to approval by any branch of government
• E)are subject to the approval of the electorate

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Definitions:

Simple Interest

Simple Interest is a calculation of interest that does not take into account the effect of compounding. It is typically calculated by multiplying the daily interest rate by the principal amount and the number of days that elapse between payments.

Early Redemption

The act of returning a financial instrument, such as a bond, before its maturity date, often subjecting the holder to a penalty or reduced return.

Term Deposit

A financial vehicle offered by banks that locks funds for a certain period, earning a specified interest rate.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities.