In Which of the Following Situations Would the Fed Conduct

question 88

Multiple Choice

In which of the following situations would the Fed conduct contractionary monetary policy?

• A)The Fed believes that aggregate demand was growing too slowly to keep up with potential GDP.
• B)The Fed fears that unemployment is climbing above the natural rate.
• C)The Fed is concerned that aggregate demand would continue to exceed the growth in potential GDP.
• D)The Fed is worried that deflation will become a problem.

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Definitions:

Behavioral

Relating to the study of observable actions or responses in individuals, often used in psychology to analyze and modify unwanted behaviors.

Locus of Control

A psychological concept that refers to how strongly people believe they have control over the situations and experiences that affect their lives.

Performance Standards

Established expectations or benchmarks used to measure and evaluate the quality of work, performance, or outcomes.

Self-Efficacy Standards

Beliefs an individual holds regarding their own ability to successfully perform and achieve tasks.