When the Fed Purchases Additional Securities and Shifts to a More

question 53

Multiple Choice

When the Fed purchases additional securities and shifts to a more expansionary monetary policy,

• A) the inflation rate will rise almost immediately.
• B) the growth of output and employment will increase quickly.
• C) several months will typically pass before the shift in policy exerts much impact on output and employment.
• D) this policy will eventually lead to a decline in the general level  of prices if it is continued for a prolonged period of time.

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Definitions:

Distribution

Distribution involves the process of making goods or services available for use or consumption by consumers or businesses.

National Cooperative Research Act

Legislation that enables companies to collaborate on research and development efforts without immediately being subject to antitrust laws.

Joint Ventures

Business arrangements where two or more parties agree to pool their resources for the purpose of accomplishing a specific task or project.

Research and Development

The systematic investigation and innovation aimed at the discovery and application of new knowledge, typically to create new products or improve existing ones.