If the Fed Uses a Passive Monetary Policy During Weak

question 58

Multiple Choice

If the Fed uses a passive monetary policy during weak economic conditions,

• A)it increases the money supply substantially.
• B)it reduces the money supply substantially.
• C)it allows the economy to fix itself.
• D)it purchases commercial paper and mortgage-backed securities.

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Definitions:

Behavioural Economics

A field of study that analyzes the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.

Consumer Economics

A branch of economics that deals with the study of how individuals make decisions to allocate their resources over consuming goods and services.

Standard Of Living

The degree of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

International Standards

Specific criteria and guidelines established by international bodies to ensure that products, services, and processes are safe, reliable, and consistently perform as intended across different countries.