Reduction of Interest Rates Was Ineffective in Fighting the Great

question 24

Multiple Choice

Reduction of interest rates was ineffective in fighting the Great Recession because:

• A) Congress decreased government spending to balance the budget.
• B) crowding-out occurred.
• C) the economy was dangerously close to a liquidity trap.
• D) businesses and consumers borrowed and spent so much that it caused an inflationary gap.

---

Definitions:

FIFO Method

"First In, First Out" method of inventory valuation where the oldest inventory items are recorded as sold first.

Job Order Cost Accounting

A costing method that gathers costs of materials, labor, and overhead for individual jobs or batches.

Process Costing Systems

Process costing systems are accounting methods used to allocate production costs to units of output, particularly effective in industries that produce identical or similar products in continuous processes.