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:

Manic Episode

A period of abnormally elevated or irritable mood, arousal, and/or energy levels, often seen in bipolar disorder.

Unipolar Episode

A period characterized by a severe mood that is consistently in one emotional state (usually depression), without episodes of mania.

Depressive Episode

A period marked by a severely depressed mood or a loss of interest in activities, affecting the individual's daily functioning.

Dissociative Identity Disorders

A severe form of dissociation, a mental process which produces a lack of connection in a person's thoughts, memories, feelings, actions, or sense of identity, often characterized by the presence of two or more distinct personality states.