If the Fed Seeks to Constrain Inflation,it Would Be Most

question 168

Multiple Choice

If the Fed seeks to constrain inflation,it would be most likely to

• A)sell government bonds to banks in order to reduce the amount of loanable funds.
• B)buy government bonds from banks in order to reduce the amount of loanable funds.
• C)raise taxes in order to reduce the money supply.
• D)cut the required reserve ratio in order to reduce the amount of excess reserves banks have to loan out.

---

Definitions:

Psychosocial Development

The development of the personality and the acquisition of social attitudes and skills from infancy through maturity.

Erikson

A psychosocial development theorist known for his 8-stage theory of human development.

Initiative Versus Guilt

Erikson’s third psychosocial stage in which young children develop a sense of purposefulness, try new skills and activities, and take pride in their accomplishments, as well as feel guilt if they are unsuccessful.

Economic Labor

The work performed by individuals that contributes to the production of goods and services in an economy.