What are open market operations? Explain how an open market
purchase works. Now show the impact of an open market purchase of
$500 million worth of bonds by the Fed on the balance sheets of the
banking system. Assume a reserve ratio of 10%.
Which two items should be compared to most usefully show the
impact that changes in efficiency of operations have had on
performance?
static planning budget and flexible budget
master budget and static planning budget
flexible budget and actual results