Monetary Policy Is Said to Be Accommodating When

question 43

Multiple Choice

Monetary policy is said to be accommodating when

• A)the central bank undertakes open market sales to fight inflation
• B)the central bank responds to a tax increase by increasing money supply
• C)the central bank responds to fiscal expansion by undertaking open market sales
• D)in the course of fiscal expansion, the central bank increases money supply to prevent interest rates from rising
• E)the central bank does not interfere in any way when the government undertakes fiscal policy

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Definitions:

Secured Creditor

A creditor that has a legal claim, called a lien, on the debtor's assets, ensuring priority payment if the debtor defaults on the obligation.

Unsecured Creditor

A creditor who extends credit without requiring specific collateral to secure the debt owed by the borrower.

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized if the loan is not repaid.

Debt Amount

The total sum of money that is owed by an individual, company, or other entity.