To Close a Recessionary Gap, the Federal Reserve Must ________

question 90

Multiple Choice

To close a recessionary gap, the Federal Reserve must ________ real interest rates by ________ the money supply.

• A)increase; increasing
• B)increase; decreasing
• C)decrease; decreasing
• D)decrease; increasing

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Definitions:

Happiness

A state of well-being and contentment, often considered as an aim of human life.

Satisfaction

The fulfillment of one's wishes, expectations, or needs, or the pleasure derived from this.

Budget Line

An illustrative depiction of every possible pairing of two items that could be bought within a set budget at unchanging prices.

Slope

A measure of the steepness or incline of a line, often calculated as the ratio of the vertical change to the horizontal change between two points on the line.