In 2010 the U

question 33

Multiple Choice

In 2010 the U.S.government was running a large deficit.Some were concerned that pressures might be put on the Federal Reserve to purchase government bonds to help the government finance this deficit.If the Fed were to buy government bonds to help the government finance its expenditures,then

• A)the price level would fall,so the value of money would fall.
• B)the price level would fall,so the value of money would rise.
• C)the price level would rise,so the value of money would fall.
• D)the price level would rise,so the value of money would rise.

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Definitions:

Deferred Tax

A tax liability or asset that arises due to the temporary differences between the accounting income and the taxable income.

Goodwill

The value attributed to a company's brand name, customer relationships, and other intangible assets that are not separately identifiable.

Liabilities

are present financial obligations arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits.

Tax Rate

The percentage at which an individual or corporation is taxed.