Suppose That During a Period of Inflation, the Fed Reduced

question 169

Multiple Choice

Suppose that during a period of inflation, the Fed reduced its holdings of U.S. securities from $600 billion to $580 billion. This indicates that the Fed was

• A) seeking to reduce the money supply to decrease inflation.
• B) trying to force Congress to decrease taxes.
• C) expanding the money supply and stimulating employment.
• D) expanding the money supply, even though the existing inflation suggested a restrictive policy would be more appropriate.

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Definitions:

Kohlberg

Lawrence Kohlberg was a psychologist best known for his theory of stages of moral development.

Erikson

Erik Erikson was a developmental psychologist known for his theory on the psychosocial development of human beings, which postulates that individuals go through eight stages from infancy to adulthood, each accompanied by a specific psychological challenge.

Idealistic Standards

Expectations or goals that are highly ambitious and often unrealistically perfect or optimistic.

Parents' Values

Beliefs and principles that parents consider important and attempt to instill in their children.