Which of the Following Is an Accurate Statement Concerning the Tradeoff

question 27

Multiple Choice

Which of the following is an accurate statement concerning the tradeoff to the economy resulting from monetary policy?

• A)The buying of securities from an expansionary monetary policy may stifle output and result in a recession.
• B)The tradeoff of an expansionary monetary policy is that while the buying of securities will increase money supply and stimulate the economy through increased spending, there will be increased pressure on prices thus running the risk of inflation.
• C)The buying of securities from a contractionary monetary policy will result in an increase in the number of loans and a decreased price level.
• D)The selling of securities in a contractionary monetary policy may result in an increase in unemployment.

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