The Trading Desk at the Federal Reserve Bank of New York is in charge of carrying on the short term objectives specified by the Federal Open Market Committee (FOMC). The Trading Desk engages in open market operations (OMO), which are the purchase and sale of Fed's securities.
In this case, in order to lower the float, the Trading Desk should carry on a defensive open market sale which should temporarily lower the interest rate. Defense open market operations are designed to offset temporary fluctuations, they shouldn't affect overall monetary policy.
The correct answer is letter "C": Is used to record the income effects of errors in making change and/or processing petty cash transactions.
Explanation:
The Cash Over and Short account is used to register a company's cash shortages and overages. <em>It is an Income Statement account used by firms in front of inaccurate differences at the moment of replenishing a petty cash fund.</em> In such a case, the Cash Over and Short account is useful to measure employee's cash management efficiency.
D. society’s scarce resources are used to produce products that align with consumer preferences
Explanation:
Allocation efficiency is a point in the economy when the goods and services being produced are exactly what the customers or people of the economy want and this is a point of production when marginal social benefit of producing the good is equal to the producers marginal cost.
In the given small open economy , if government increase the government purchases than people in the economy will have more or increased money supply, so when the rates are fixed , in the short run , the income will rise with exchange rates remaining same. Thus option A is definitely correct as money supply would be increased to keep exchange rates fixed and augmenting the effects of government spending on income.
