If People Decide to Hold More Currency Relative to Deposits,the

question 49

Multiple Choice

If people decide to hold more currency relative to deposits,the money supply

• A)falls.The Fed could lessen the impact of this by buying Treasury bonds.
• B)falls.The Fed could lessen the impact of this by selling Treasury bonds.
• C)rises.The Fed could lessen the impact of this by buying Treasury bonds.
• D)rises.The Fed could lessen the impact of the by selling Treasury bonds.

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Definitions:

Net Sales

The total revenue from sales minus returns, allowances, and discounts.

Gross Profit

The financial gain obtained after subtracting the cost of goods sold from net sales revenues, indicating the efficiency of core business operations.

Beginning Inventory

The value of a company's inventory at the start of an accounting period, carried over from the end of the previous period.

Days In Inventory Ratio

A financial metric indicating the average number of days a company holds inventory before selling it, calculated as inventory divided by cost of goods sold, then multiplied by 365 days.