Wage and Price Controls and Income Policies Are Techniques Advocated

question 55

Multiple Choice

Wage and price controls and income policies are techniques advocated to

• A) shift the Phillips curve to the left.
• B) shift the aggregate supply curve to the left.
• C) shift the 45-degree line to the left.
• D) shift the production possibilities curve to the left.
• E) control inflation by increasing the rate of unemployment.

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Definitions:

Federal Reserve

The principal banking authority in the United States, responsible for overseeing the nation's financial and monetary systems.

Reserve Requirement

The reserve requirement is a central banking regulation that sets the minimum amount of reserves that must be held by a commercial bank, not to be loaned out, to ensure bank liquidity and stability.

Open Market Sale

The sale of government bonds by the central bank to reduce the money supply in the economy.

Money Supply

The complete sum of available financial resources in an economy, including cash, coins, and the funds available in checking and savings accounts, at a particular instant.