Which Tool of Monetary Policy Does the Federal Reserve Use

question 43

Multiple Choice

Which tool of monetary policy does the Federal Reserve use most often?

• A)term auctions
• B)open-market operations
• C)changes in reserve requirements
• D)changes in the discount rate

Understand the definition and components of cash equivalents.

Differentiate between current assets, non-current assets, current liabilities, and non-current liabilities.

Identify financial instruments not considered as cash equivalents.

Understand the reporting and classification of bank indebtedness.

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Definitions:

Unilateral Approach

A policy or action undertaken by a single government or organization independently, rather than by agreement with others.

Free Trade

An economic policy that allows imports and exports between countries with minimal or no barriers such as tariffs, quotas, or legislation.

Subsidize

To provide financial assistance to individuals or businesses, typically done by the government to support specific economic activities.

Artifically Low Prices

Prices set below the market equilibrium through external interventions, often leading to shortages or excess demand.