In Addition to Open Market Operations and the Required Reserve

question 291

Multiple Choice

In addition to open market operations and the required reserve ratio, another tool of monetary policy available to the Fed is

• A) fiscal policy.
• B) tax rates and the progressivity of the income-tax system.
• C) government spending and various transfer-payment programs.
• D) the difference between the discount rate and the federal funds rate.

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Definitions:

Owner's Equity

The total value of assets owned by the proprietorship after all debts and liabilities have been settled; essentially the net worth of a company.

Liabilities

Financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Assets

Assets are possessions or property that a company owns or controls, anticipated to yield benefits in the future.

Claims

Demands for payment or entitlements to compensation for loss, damage, or injury; often encountered in insurance and legal contexts.