According to the Austrian View of the Business Cycle, Expansionary

question 72

Multiple Choice

According to the Austrian view of the business cycle, expansionary monetary policy that pushes the interest rate to an artificially low level will

• A)lead to an increase in long-term investments like houses and office buildings without generating the savings that will be required for their purchase in the future.
• B)lead to a reduction in long-term investments like houses and office buildings that will quickly throw the economy into a recession.
• C)lead to an increase in long-term investments like houses and office buildings that will enhance the long-term growth of the economy.
• D)lead to a reduction in investment, but there will be no impact on output, employment or the general level of prices.

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Definitions:

Normal Distribution

A bell-shaped frequency distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Finite Population Correction Factor

A factor applied to the calculation of sampling error when sampling without replacement from a finite population.

Infinite Population

A theoretical concept in statistics where the population size is considered boundlessly large.

Standard Deviation

An indicator that measures the level of disparity or distribution of values in a dataset from its mean.