If Policy Makers Wanted to Use Both Monetary and Fiscal

question 6

Multiple Choice

If policy makers wanted to use both monetary and fiscal policy to stimulate demand and reduce a high rate of unemployment, which of the following would be most appropriate?

• A) a larger budget deficit and the purchase of securities in the open market
• B) a government surplus and the sale of securities in the open market
• C) a larger government deficit and an increase in the discount rate
• D) a government surplus and a reduction in the discount rate

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Definitions:

Custom

Established practices or behaviors that are traditional and widely accepted within a specific culture or society.

Individualism/Collectivism

Refers to a cultural dimension that emphasizes the degree to which individuals are integrated into groups, with individualism favoring personal autonomy and collectivism emphasizing interdependence.

Uncertainty Avoidance

A cultural dimension describing the extent to which societies tolerate ambiguity and uncertainty, influencing their norms, behaviors, and decision-making processes.

Nuclear Family

A family unit consisting of two parents and their children (biological or adopted), considered a basic social unit.