The purpose of a restrictive monetary policy is to:
A. alleviate recessions.
B. raise interest rates and restrict the availability of bank credit.
C. increase aggregate demand and GDP.
D. increase investment spending.
B. raise interest rates and restrict the availability of bank credit.
You might also like to view...
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Why was a fixed price of $50 not the best way of allocating used laptops? Suggest other possible ways of distributing the laptops that would be efficient
What will be an ideal response?
Which of the following is an incorrect observation? a. Import tariffs benefit domestic producers and the government, but harms domestic consumers
b. Gains from trade in terms of world output are reduced by export subsidies. c. The overall domestic employment effects of a tariff imposition are likely to be positive. d. If the imposition of a tariff leads to retaliatory tariffs by other countries, domestic employment outside the industry gaining the tariff protection would likely suffer.
An increase in the nominal interest rate would
a. encourage people to hold smaller money balances. b. encourage people to hold larger money balances. c. force the Fed to reduce the money supply. d. cause the real interest rate to decline.