Expansionary Monetary Policy Is Achieved By

question 72

Multiple Choice

Expansionary monetary policy is achieved by:

• A)decreasing the amount of bank reserves and lowering the federal funds rate.
• B)decreasing the amount of bank reserves and raising the federal funds rate.
• C)increasing the amount of bank reserves and lowering the federal funds rate.
• D)increasing the amount of bank reserves and raising the federal funds rate.

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Definitions:

Opportunity Cost

The cost of choosing one alternative over another, represented by the benefit foregone from not choosing the next best alternative.

Inefficient

Referring to a lack of effectiveness, not achieving maximum productivity; resulting in a waste of time, energy, or material.

Efficient

The state of achieving a maximum output from given resources, with minimal waste or inefficiency.

Normative Statement

Prescriptive assertions that express judgments about whether a situation is desirable or undesirable, reflecting values rather than facts.