If the Fed Sells Bonds Through Its Open Market Operations

question 284

Multiple Choice

If the Fed sells bonds through its open market operations, then there is

• A) an increase in the demand for bonds and a rise in the price of existing bonds.
• B) an increase in the supply of bonds and a fall in the price of existing bonds.
• C) a decrease in interest rates because of the increase in the supply of bonds.
• D) a decrease in interest rates because of the decrease in the demand for bonds.

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Definitions:

Variable Overhead Spending Variance

Refers to the difference between the actual variable overheads incurred and the standard variable overheads expected for the actual production level.

Direct Labor Efficiency Variance

The difference between the actual hours of direct labor used and the standard hours expected for the production achieved.

Direct Labor Rate Variance

A financial metric used to measure the difference between the actual hourly wage paid to workers and the expected (or standard) wage rate for a specific period.

Standard Direct Labor Cost

The predetermined cost of labor assigned directly to the production of goods, based on estimated time and wage rates.