The Federal Reserve is anticipating a contractionary period in the economy. The Fed decides to engage in open market operations to stimulate the economy. This action is
A. passive policymaking.
B. nondiscretionary rule.
C. the monetary rule.
D. active policymaking.
Answer: D
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Describe and explain the real business cycle theory
What will be an ideal response?
According to the law of one price
A) a company can only charge one price for a product, no matter which nation the product is sold in. B) interest rates across nations should be the same when adjusted for exchange rates. C) goods that are easily tradable across nations should sell for the same price expressed in a common currency. D) the price of gold should differ between nations.
The quantity of loanable funds supplied increases if the ________, all other things remaining the same, because the ________
A) real interest rate falls; real interest rate is the opportunity cost of consumption B) real interest rate rises; real interest rate is the opportunity cost of saving C) real interest rate falls; real interest rate is the opportunity cost of saving D) real interest rate rises; cost of living is determined by the real interest rate E) real interest rate rises; real interest rate is the opportunity cost of consumption
Which of the following is not an example of a practice that facilitates "tacit collusion"?
A) Uniform prices charged by the firms in a particular industry. B) Advance notice of price changes by one or more of the firms in an industry. C) The use of most-favored-customer clauses. D) The formation of a cartel.