A Reduction in Interest Rates by the Fed with the Intention

question 41

Multiple Choice

A reduction in interest rates by the Fed with the intention of reducing a recessionary gap is called:

• A)expansionary monetary policy.
• B)contractionary monetary policy.
• C)monetary tightening.
• D)autonomous monetary policy.

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Definitions:

Stock Price

The cost of purchasing a share of a company, determined by the supply and demand in the stock market.

Forward Contract

A financial contract between two parties to buy or sell an asset at a predetermined future date and price.

Future Date

A specified date in the future at which an event is scheduled to occur or a deadline is to be met.

Quantity

The amount or number of a material or immaterial entity that is accessible or demanded.