When the Fed Responds to a Negative Spending Shock by Increasing

question 13

Multiple Choice

When the Fed responds to a negative spending shock by increasing the money supply,it is using:

• A) a policy rule.
• B) a discretionary policy.
• C) its political power.
• D) its credibility.

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Definitions:

Primary Consumers

Organisms that feed directly on producers in a food chain, typically herbivores that eat plants.

Trophic Level

The position an organism occupies in a food chain, indicating its level of feeding and energy transfer.

Bacteria

Microscopic, single-celled organisms found in virtually all environments, some of which can cause disease.

Water Table

The level below which the ground is saturated with water, an important concept in hydrology and environmental science.