The Federal Reserve Plays a Larger Role Than Congress and the President

question 111

Multiple Choice

The Federal Reserve plays a larger role than Congress and the president in stabilizing the economy because

• A)the Federal Reserve can more quickly change monetary policy than the president and the Congress can change fiscal policy.
• B)the Federal Reserve can immediately recognize when real GDP is below or above potential GDP.
• C)changes in interest rates have a considerably larger effect on the economy than changes in government purchases or taxes.
• D)changes in interest rates have their full effect on the economy in a short period of time,whereas changes in government spending and taxes have their full effect over a long period of time.

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Definitions:

Revokes Acceptance

The legal act of canceling or withdrawing approval of a previously accepted offer or contract, often due to the discovery of a significant flaw or misrepresentation.

Consumers Choice

The decision-making process by which customers select from available products or services based on preferences and factors like price and quality.

Digital Devices

Electronic tools or systems that generate, store, or process data, typically in binary form.

Nonconformity

A deviation or failure to meet specified standards or requirements, often related to quality control in manufacturing or service delivery.