Why Might the Fed Decide to Monetize the Deficit

question 72

Multiple Choice

Why might the Fed decide to monetize the deficit?

• A)to keep inflation low 
• B)to reduce the structural deficit 
• C)to reduce the budget deficit 
• D)to keep interest rates low

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Definitions:

Cost Analysis

The process of evaluating the costs involved in producing a product or providing a service, to determine ways to reduce or manage expenditures.

R-squared

A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model.

Dependent Variable

A variable that responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation Y = a + bX.

Independent Variable

A variable in an experiment that is manipulated to observe its effect on the dependent variable.