The Discount Rate Cannot Be Used to Control the Money

question 14

True/False

The discount rate cannot be used to control the money supply with great precision because its effects on banks' demand for reserves are uncertain.

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Definitions:

Net Income

Net earnings of a business post deductions of any costs and taxes from revenue.

Cash Dividend

A distribution of a company's earnings to its shareholders in the form of cash.

Consolidated Balance Sheet

A balance sheet that presents the assets, liabilities, and equity of a parent company and its subsidiaries as one entity, after eliminating inter-company transactions.

Deferred Income Tax Asset

A Deferred Income Tax Asset is an accounting term for items that reduce future tax payments due to temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities.