When the Fed Sells $100 Million of Securities to a Commercial

question 173

Multiple Choice

When the Fed sells $100 million of securities to a commercial bank,the

• A)monetary base increases.
• B)money supply increases.
• C)bank's reserves decrease.
• D)required reserve ratio decreases.
• E)bank's reserves do not change.

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Definitions:

Equivalent Unit

A measure used in cost accounting to express the amount of work done on incomplete products in terms of complete units of output.

Departmental Work

Refers to the division of tasks and responsibilities into specific departments within an organization, each with its specialized function.

FIFO

First In, First Out (FIFO) is an accounting method for valuing inventory, where the oldest inventory items are sold first.

Direct Materials

The raw materials that are directly traceable to the production of a product.