If the Fed Adopts a Policy of Pegging the Interest

question 23

Multiple Choice

If the Fed adopts a policy of pegging the interest rate,a ________ in government spending forces the Fed to increase the money supply to prevent interest rates from ________.

• A)fall;increasing
• B)fall;decreasing
• C)rise;decreasing
• D)rise;increasing

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Definitions:

Average Fixed Costs

The fixed costs of production (costs that do not change with the level of output) divided by the number of units produced.

Drones

Unmanned aerial vehicles or aircraft systems operated by remote control or onboard computers.

Drone

An unmanned aerial vehicle (UAV) operated by remote control or onboard computers, used for various purposes including photography, surveillance, and recreation.

Average Variable Costs

The sum of all costs that vary with output levels, when divided by the number of units produced.