If Saving Exceeds Investment, the Appropriate Countercyclical Monetary Policy Would

question 55

Multiple Choice

If saving exceeds investment, the appropriate countercyclical monetary policy would be:

• A)an increase in the reserve requirement.
• B)a cut in the discount rate.
• C)an open market sale of government bonds.
• D)an increase in the federal funds rate.

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Definitions:

Establish and Enforce

The process of setting up rules or principles and ensuring their observance by applying penalties for violations.

Authoritative Parents

Parents who are both demanding and responsive, they set clear standards for their children but also encourage independence and are attentive to their needs.

Legalistic

Adhering strictly to the letter or strict interpretation of the law or rules, often disregarding the spirit or intention behind them.

Permissive

A parenting or management style characterized by low demands with high responsiveness.