Which of the Following Characterizes the Fed's Ability to Prevent

question 214

Multiple Choice

Which of the following characterizes the Fed's ability to prevent recessions?

• A)The Fed is able to "fine tune" the economy and entirely eliminate recessions.
• B)The Fed is incapable of changing aggregate demand through its monetary policy tools.
• C)The Fed is able to keep a recession shorter and milder than it would otherwise be.
• D)The Fed is able to eliminate the business cycle and achieve absolute price stability.

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Definitions:

Flexible

Being able to bend easily without breaking; adaptability to change or to accommodate new situations.

Bulimia

An eating disorder characterized by binge eating followed by purging to prevent weight gain.

Purging

The act of removing or getting rid of something undesirable, often used in medical contexts to describe the evacuation of the bowels or the removal of toxins from the body.

Positive Outlook

An attitude or mindset that focuses on the positive aspects of a situation, often associated with optimism and hopeful anticipation.