If Investment Spending Is Relatively Insensitive to Changes in the Interest

question 31

Multiple Choice

If investment spending is relatively insensitive to changes in the interest rate, then the most effective expansionary policy would be

• A)a reduction in required reserves.
• B)Fed purchases of government securities.
• C)a personal income tax increase.
• D)a personal income tax cut.

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Definitions:

Long Spells Of Unemployment

Extended periods in which an individual is actively seeking but unable to find employment.

Bureau Of Labor Statistics

A U.S. government agency responsible for collecting and analyzing economic data related to employment, labor market activity, working conditions, and price changes.

Household Survey

A survey method involving the collection of data through interviews or questionnaires from a sample of households, typically used to gather information on demographics, employment, and economic conditions.

Establishment Survey

A statistical survey that collects data from businesses or establishments, often used to gather employment and economic activity information.