If the Fed Wishes to Stimulate Aggregate Demand, It Will

question 132

Multiple Choice

If the Fed wishes to stimulate aggregate demand, it will conduct an open market

• A) sale which will lower bond prices, lower interest rates, and stimulate investment.
• B) purchase which will lower bond prices, lower interest rates, and discourage investment.
• C) sale which will lower bond prices, raise interest rates, and discourage investment.
• D) purchase which will raise bond prices, lower interest rates, and stimulate investment.

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Definitions:

Presumption

An assumption that is taken for granted, often without conclusive evidence.

Jean-Jacques Rousseau

A Genevan philosopher, writer, and composer of the 18th century, known for his influential thoughts on education and social contract theory.

Thomas Hobbes

An English philosopher known for his work in political philosophy, notably "Leviathan," advocating for the social contract theory.

John Rawls

A 20th-century American political philosopher who is known for his theory of justice as fairness, which attempts to reconcile egalitarian and liberal principles, detailed in his works such as "A Theory of Justice."