In Response to the Great Recession of 2007-2009, the Federal

question 46

Multiple Choice

In response to the Great Recession of 2007-2009, the Federal Reserve (Fed) attempted to grow the U.S.economy with a policy called quantitative easing, which would pump more dollars into the economy and cause interest rates to fall.Which of the following was NOT a criticism of the policy?

• A) The policy could lead to a depreciation in the dollar's exchange value.
• B) The policy could improve American competitiveness at other nations' expense.
• C) The rest of the world's producers could see their exports begin to fall.
• D) Americans goods would become more expensive for foreign consumers.

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Definitions:

Marginal Product

The additional output gained by adding one more unit of a specific input, keeping all other inputs constant.

Economic Profit

The profit from an activity or business venture after subtracting both explicit and implicit costs, including opportunity costs.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's cost.

Total Costs

The overall expense incurred in the production of goods or services, including both fixed and variable costs.