Which of the Following Generally Occurs When a Central Bank

question 17

Multiple Choice

Which of the following generally occurs when a central bank pursues expansionary monetary policy?

• A) The central bank purchases bonds and the interest rate decreases.
• B) The central bank sells bonds and the interest rate increases.
• C) The central bank purchases bonds and the interest rate increases.
• D) The central bank sells bonds and the interest rate decreases.
• E) The central bank purchases reserves and the interest rate decreases.

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Definitions:

Blacksmiths

Artisans who work with metal, particularly iron, using tools to forge and shape it into products such as tools, weapons, and structures.

AFL

The American Federation of Labor, a national federation of labor unions in the United States, founded in 1886 and focused on skilled workers.

Knights of Labor

A significant labor organization in the United States during the 19th century that sought to organize workers across different industries to improve working conditions.

Unions

Organizations formed by workers to protect their rights, negotiate collective contracts, and provide support to members on employment matters.