The Fed (Which Is the Central Bank in the U

question 16

Multiple Choice

The Fed (which is the central bank in the U.S.) greatly increased the monetary base in 2009 and 2010 by purchasing assets in an attempt to boost the economy,while making it known that they intended on selling these assets once the economy showed signs of stability,and at the same time keep a watchful eye on possible inflation.The Fed's inflation expectations would most likely be considered as ________,and the Fed was able to increase the monetary base without causing expected inflation to increase because their intentions and statements were generally considered ________.

• A) adaptive; not credible
• B) adaptive; credible
• C) rational; not credible
• D) rational; credible

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Definitions:

Stimulants

Substances that elevate mood, increase feelings of well-being, and enhance energy and alertness.

Depressants

A class of drugs that reduce the functioning of the nervous system and can lead to decreased arousal or stimulation in individuals.

Narcotics

A class of depressant drugs derived from the opium poppy that produce both pain-relieving and calming effects.

Marijuana

A psychoactive drug derived from the Cannabis plant, used for recreational or medicinal purposes, affecting mood, perception, and cognitive functions.