The Federal Reserve buying government bonds is considered:
a) easy money.
b) tight money.
c) expansionary monetary policy.
d) contractionary monetary policy.
Ans: c) expansionary monetary policy.
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Suppose that during 2009, the actual real GDP of Chile was 3.5 billion pesos at the same time the potential GDP was 3.4 billion pesos. What sort of equilibrium existed in Chile?
What will be an ideal response?
If the price of Big Mac is $3.61 in the U.S. and 3.405 € in France, and PPP holds, what is the value of the euro in dollars that is implied by The Economist magazine's Big Mac index?
A) $1.060 B) $0.943 C) $1.943 D) None of the above.
The ability of a central bank to set monetary policy instruments is
A) political independence. B) goal independence. C) policy independence. D) instrument independence.
The variability of business profits:
A. Helps explain the instability of investments over time B. Does not affect investment spending, which depends on expected profits not current profits C. Explains why the durability of capital goods is variable D. Causes the variations in consumption spending over time