If the Fed Engages in Open Market Sales in Direct

question 141

Multiple Choice

If the Fed engages in open market sales in direct response to an increase in the rate of inflation, this is known as

• A) direct policymaking.
• B) active policymaking.
• C) passive policymaking.
• D) fiscal policymaking.

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Definitions:

Operating Income

The profit earned from a firm's normal core business operations, calculated before the deduction of interest and taxes.

Fixed Manufacturing Overhead

Costs associated with production that do not vary with the level of output, such as salaries of managers and depreciation of factory equipment.

Deferred

A term indicating that something has been postponed or delayed, often referring to income, taxes, or expenses.

Inventories

Assets held for sale in the ordinary course of business, or materials that will be used in the production of goods to be sold.