If Strong Monetary Policy Stimulus Is Used to Combat a Recessionary

question 65

Multiple Choice

If strong monetary policy stimulus is used to combat a recessionary gap, what will happen?

• A)a rapid movement toward lower unemployment and higher inflation 
• B)a rapid movement toward lower unemployment and lower inflation 
• C)a slow movement toward lower unemployment and higher inflation 
• D)a slow movement toward lower unemployment and lower inflation

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Definitions:

Initial Margin

The minimum amount of funds required to open a position in the futures market, intended to cover potential losses.

Maintenance Margin

The minimum amount of capital that must be maintained in a margin account after a purchase or trade, to cover the risk of loss.

Margin Call

A requirement from a broker for an investor to add more cash or securities to their account to mitigate potential losses.

Short 100 Shares

The action of borrowing 100 shares of a stock to sell them with the expectation of buying them back later at a lower price.