Contractionary Monetary Policy Occurs When

question 134

Multiple Choice

Contractionary monetary policy occurs when

• A) a central bank acts to decrease the money supply in an effort to control an economy that is expanding too quickly.
• B) Congress and the president increase taxes in an effort to control an economy that is expanding too quickly.
• C) Congress and the president decrease taxes in an effort to stimulate the economy.
• D) a central bank acts to increase the money supply in an effort to stimulate the economy.
• E) a central bank acts to increase government spending in an effort to stimulate the economy.

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Definitions:

Inputs

Resources used in the production process, including labor, capital, materials, and energy.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specified period.

Total Revenue

The overall income generated by a business from its sale of goods or services, calculated as the price per unit times the number of units sold.

Elasticity Of Supply

A measure of how much the quantity supplied of a good changes in response to a change in price.