If saving is less than investment, the appropriate countercyclical monetary policy would be:
A. an open market sale of government bonds.
B. a cut in the reserve requirement.
C. a cut in the federal funds rate.
D. a cut in the discount rate.
Answer: A
You might also like to view...
Refer to the Article Summary. When Fed Chair Janet Yellen announced that a rate increase would be warranted by the end of the year, she was was referring to the
A) required reserve rate. B) long-term real rate of interest. C) prime rate. D) federal funds rate.
Public choice theory assumes that government makes optimal policies to respond to the shortcomings of private markets
a. True b. False
What is the shape of the average fixed cost curve for a firm in the short run?
a. U-shaped. b. A curve that constantly increases as output expands and eventually approaches infinity at high rates of output. c. A vertical line. d. A curve that declines as output expands and approaches the horizontal-axis when output is large.
The laissez faire view of government involvement in the economy is most consistent with the
A. Supply-side theory. B. Keynesian theory. C. Monetary theory. D. Classical theory.