Which of the Following Is a Lesson That Can Be

question 85

Multiple Choice

Which of the following is a lesson that can be learned from monetary policy during the Great Depression?

• A) Monetary policy should be changed frequently in response to economic fluctuations.
• B) Prolonged periods of monetary contraction will retard economic growth.
• C) Low interest rates will direct an economy toward recovery.
• D) Monetary policy should focus on variables such as output and employment.

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Definitions:

Exploitation Of Labor

The unfair treatment of workers, often involving overstretched work hours, underpayment, or poor working conditions, for the benefit of employers.

Eurodollar Market

The debt market created when foreign banks with eurodollar deposits lend those funds.

European Banks

Financial institutions based in Europe which engage in all kinds of banking services including deposits, loans, and investments.

Translation Risk

The gain or loss on the value of assets and liabilities held in another country that results from variation in exchange rates. Generally relatively meaningless as long as the foreign operation is not liquidated or sold. Therefore not generally taxable.