In 2010 the U

question 147

Multiple Choice

In 2010 the U.S. government was running a large deficit. Some were concerned that pressures might be put on the Federal Reserve to purchase government bonds to help the government finance this deficit. If the Fed were to buy government bonds to help the government finance its expenditures, then the price level would

• A)fall, so the value of money would fall.
• B)fall, so the value of money would rise.
• C)rise, so the value of money would fall.
• D)rise, so the value of money would rise.

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Definitions:

Responsive

Characterized by the ability to react quickly and positively to changes or new situations, often used in describing systems, organizations, or individuals who effectively adapt to new conditions or demands.

Efficient

Achieving maximum productivity with minimum wasted effort or expense; effectiveness in performance.

Privatization

The process of transferring an enterprise or industry from the public sector to the private sector.

Government

The system or group of people governing an organized community, often a state, and the mechanism by which state policies are enforced and public affairs managed.