Under the U

question 71

Multiple Choice

Under the U.S. macroeconomic policy package of 1965-1968, President Lyndon Johnson backed an increase in U.S. government spending that was financed by

• A) the sale of gold reserves.
• B) borrowing from the International Monetary Fund.
• C) an increase in the money supply.
• D) an increase in taxes.
• E) selling bonds in the international capital market.

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Definitions:

Purchasing Power Risk

The risk that the value of money will decrease over time due to inflation, affecting the real value of investments and savings.

Investment Principal

A sum of money invested initially in a financial instrument or vehicle, which serves as the base on which returns or interest is calculated.

Passive Asset Allocation

An investment strategy that aims to build a portfolio mimicking a market index's composition, requiring minimal buying and selling.

Proportions

The quantitative relationship between two amounts, showing the number of times one value contains or is contained within the other.