If the Index of Leading Indicators and Other Forecasting Devices

question 107

Multiple Choice

If the index of leading indicators and other forecasting devices suggested that the economy is moving into an inflationary boom, activists' economic policy would call for

• A) a decrease in money supply growth and a tax increase.
• B) an increase in money supply growth and a shift toward a budget deficit.
• C) an increase in money supply growth and a tax decrease.
• D) a continuation of the policies already in place.

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Definitions:

Legal Reserves

Funds that banks are legally required to hold in reserve against deposits made by their customers, either as cash in the bank or as deposits in the central bank.

Federal Reserve

The main bank system in the United States, tasked with managing the country's monetary policy, overseeing banking regulations, ensuring the financial system remains stable, and delivering financial services.

Liabilities

Financial obligations or debts owed by a person, company, or entity to others.

Assets

Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.