If the Fed's Policies Aim to Increase Aggregate Demand,the Fed

question 118

Multiple Choice

If the Fed's policies aim to increase aggregate demand,the Fed must fear

• A)inflation.
• B)recession.
• C)stagflation.
• D)a supply shock that decreases potential GDP.
• E)a supply shock that increases aggregate supply.

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Definitions:

Long-Term Debt

Debt obligations that are due to be paid over a period of time longer than one year.

Common Shares

Shares of stock in a company that entitle the holder to dividends and voting rights in shareholder meetings.

Acquisition Differential

The difference between the purchase price of an acquired company and the sum of its net assets' fair values.

Retained Earnings

The portion of a company's profit not distributed to shareholders as dividends but kept in the company to reinvest in its core business or to pay debt.