If the Fed's Goal Is to Keep the Interest Rate

question 94

Multiple Choice

If the Fed's goal is to keep the interest rate fixed,a contractionary fiscal policy must be accompanied by ________ monetary policy that shifts the LM curve to the ________.

• A)an expansionary,right
• B)an expansionary,left
• C)a contractionary,right
• D)a contractionary,left

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Definitions:

Administrative Expenses

Costs associated with the general administration of a business, including office supplies and salaries of non-production staff.

Planning Budget

A forecast of revenue, expenses, and cash flow used by organizations to plan for the upcoming period.

Occupancy Expenses

Costs related to occupying a physical space, such as rent, utilities, and property taxes.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity level, allowing better analysis and control over performance.