Your Roommate Is Having Trouble Grasping How Monetary Policy Works

question 178

Multiple Choice

Your roommate is having trouble grasping how monetary policy works.Which of the following explanations could you use to correctly describe the mechanism by which the Fed can affect the economy through monetary policy? Increasing the money supply

• A)lowers the interest rate,and firms increase investment spending.
• B)causes people to spend more because they know prices will rise in the future.
• C)raises the interest rate and consumers decrease spending on durable goods.
• D)lowers the interest rate,raises the value of the dollar,lowers the prices of exports,and raises net exports.

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Definitions:

Expressions Given

Expressions that are intentional and usually verbal, such as utterances.

Expressions Given Off

Non-verbal cues or behaviors that individuals unconsciously display, revealing their true feelings or intentions, despite what they may verbally express.

Resocialization

The process by which individuals undergo the alteration or replacement of existing social norms and values.

Looking-Glass Self

A concept in social psychology that suggests an individual's self-concept is shaped by how they believe others perceive them, leading to a reflection of themselves through the eyes of others.