The Federal Reserve does not pay interest on reserves held on deposit. The European System of Central Banks does pay interest on reserves held on deposit.
<h3>Federal Reserve Board</h3>
- In the past, reserve banks were unable to offer interest on deposits. The Emergency Economic Stabilization Act of 2008 brought about a shift in that.
- The Federal Reserve Board had to increase the size of its balance sheet by purchasing Treasuries and mortgage-backed securities in order to increase the amount of liquidity available to the banking sector.
<h3> European System of Central Banks</h3>
- The major objective is to preserve price stability or the euro's worth. Price stability is the most significant contribution monetary policy can make in this area because it is crucial for economic growth and job creation, two goals of the European Union.
- The ECB has four decision-making bodies with the authority to carry out the institution's goals.
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Answer: variable budget
Explanation: In simple words, variable budget refers to the budget statement which shows how much different costs would vary if the level of activity as per standards set increases or decreases.
These are also called flexible budget and are made on the basis of current level of output. These budgets provides flexibility to the management with respect to both best case and worst case scenarios.
From the above we can conclude that the correct answer is variable budget.
Option (b) for a response. In order to keep the expenditure multiplier from exceeding 1, output must increase while consumption must decrease.
<h3>Spending multiplier: What does it tell you?</h3>
An economic indicator of the impact that changes in government spending and investment have on a nation's Gross Domestic Product is the expenditure multiplier, often known as the fiscal multiplier.
<h3>When the multiplier is negative, what does that mean?</h3>
The negative multiplier effect happens when a spending leak or initial withdrawal from the circular flow has further impacts and a larger final decline in real GDP.
<h3>Why does multiplier exceed 1?</h3>
The rise in the national product indicates a rise in national income. Consumption demand rises as a result, and businesses produce to satisfy it. As a result, the increase in investment is greater than the increase in national income and product. There is a multiplier effect that exceeds one.
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I’m pretty sure the answer is c
