Which of the following reduced the effectiveness of the Fed's low interest rate policy during the aftermath of the 2008-2009 recession?
a. The heavy indebtedness of households.
b. The reduction in the earnings derived from savings accounts, certificates of deposits, and other forms of savings used by many Americans.
c. The increased fear of inflation fueled by the Fed's expansionary monetary policy.
d. All of the above.
D
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During most of the years of the Great Depression, the actual federal budget was in ________, and the cyclically adjusted budget was in ________
A) surplus; surplus B) deficit; deficit C) surplus; deficit D) deficit; surplus
Assume that the banking system has $200 billion in reserves. There are no excess reserves in the system. If the reserve requirement is decreased from 10 percent to 8 percent, what will happen to the level of excess reserves in the system?
a. There will be a deficiency of $40 billion in reserves. b. There will be a deficiency of $20 billion in reserves. c. There will be $20 billion in excess reserves. d. There will be $40 billion in excess reserves.
It is always in the interests of workers for the minimum wage to be as high as possible.
Answer the following statement true (T) or false (F)
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.