Use the Following to Answer Questions

question 16

Multiple Choice

Use the following to answer questions .
Exhibit: The Money Supply and Aggregate Demand
-(Exhibit The Money Supply and Aggregate Demand) If the economy is experiencing a recessionary gap, the Fed would

• A) sell government bonds, which would decrease the money supply and increase interest rates. The results of such a policy are represented in Panel (b).
• B) buy government bonds, which would decrease the money supply and decrease interest rates. The results of such a policy are represented in Panel (a).
• C) buy government bonds, which would increase the money supply and decrease interest rates. The results of such a policy are represented in Panel (a).
• D) sell government bonds, which would increase the money supply and decrease interest rates. The results of such a policy are represented in Panel (a).

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Definitions:

External Environment

External factors, forces, situations, and events outside the organization that can affect its performance and strategies.

Bureaucracy

A rational and efficient form of organization founded on logic, order, and legitimate authority.

Formal Authority

The power or right, usually derived from a position or office, to make decisions, give orders, and enforce obedience.

Network Structure

An organization structure that uses information technologies to link with networks of outside suppliers and service contractors.