The Federal Reserve Bank attempted to deal with the sluggish aggregate demand that followed the housing market crash and subsequent financial crisis through:
A. contractionary fiscal policy.
B. contractionary monetary policy.
C. expansionary monetary policy.
D. expansionary fiscal policy.
Answer: C
You might also like to view...
A major earthquake occurs in the central part of the United States. What impact would this have on the nation's production possibilities frontier and why?
A) It would shift outward because unemployment would be reduced. B) Nothing would happen because the nation would still have the same capabilities. C) A tradeoff would occur to replace the resources and goods destroyed. D) It would shift inward because some of the nation's resources, such as capital and labor, would be destroyed. E) It would not shift because people would get to work to replace any capital that was destroyed.
An economy currently has an inflationary gap. An increase in the money wage rate will ________ the inflationary gap and ________ the price level
A) decrease; decrease B) increase; increase C) increase; decrease D) decrease; increase
Irrespective of whether the inflation rate is high or low, if the inflation rate is above the expected level, the unemployment rate in the economy will remain stable
a. True b. False Indicate whether the statement is true or false
Believers in the hypothesis of rational expectations argue that: a. expansionary fiscal and monetary policy can reduce unemployment without creating inflation. b. a trade-off exists between unemployment and inflation even in the long run
c. the Phillips curve is vertical even in the short run for expected changes in inflation. d. the Phillips curve is downward sloping even in the long run.