When the Fed Wants to Expand the Money Supply Through

question 5

Multiple Choice

When the Fed wants to expand the money supply through open market operations, it:

• A)​sells government securities.
• B)​purchases government securities.
• C)​increase the Fed Funds rate.
• D)​decrease reserve requirements.

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Definitions:

Higher Valuation

Represents an increased assessment of a company's financial value based on its assets, earnings, and market potential.

Negative Cash Flows

A financial situation where a business or individual's outflows of cash exceed their incoming cash.

Significant Earnings

Refers to a considerable amount of profit or income generated by an individual or an organization.

Venture Capital Method

A valuation method used in private equity to estimate the value of a startup by considering expected future cash flows and potential returns to investors.