If Businesses React to a Pessimistic Outlook and Decrease Spending

question 42

Multiple Choice

If businesses react to a pessimistic outlook and decrease spending, the Fed can counteract this by

• A) decreasing money supply to spur the economy out of the recession.
• B) increasing money supply, lowering real interest rates, and encouraging borrowing.
• C) increasing government expenditures to spur the economy out of the recession.
• D) decreasing corporate taxes to encourage firms to increase their spending.

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Definitions:

Institutionalization

The process of establishing something as a norm or standard in an organizational or societal context.

Highbrow

Pertaining to or designed for people with sophisticated tastes or intellectual interests.

Lowbrow

Cultural products or activities considered to have less intellectual or artistic value, often perceived as popular or mass entertainment.

Narrowcasting

A strategy that targets media content towards a specific segment of the market or audience, focusing on specialized interests.