The Fed Can Decrease the Money Supply by Conducting Open-Market

question 8

Multiple Choice

The Fed can decrease the money supply by conducting open-market

• A)sales or by raising the discount rate.
• B)sales or by lowering the discount rate.
• C)purchases or by raising the discount rate.
• D)purchases or by lowering the discount rate.

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Definitions:

Total Period Cost

The sum of all costs incurred by a business during a specified period, excluding product costs.

Variable Costing

An accounting method that only includes variable manufacturing costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Finished Goods Inventory

Items in stock that are completed and ready for sale, representing one of the stages in the production inventory.

Variable Costing

A costing method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed manufacturing overhead from product cost calculations.