The Combined Efforts of the Fed and the Treasury in Response

question 122

Multiple Choice

The combined efforts of the Fed and the Treasury in response to the financial crisis following the housing market crash were:

• A) effective in restoring aggregate supply to its pre-crisis level, but still left the economy with sluggish aggregate demand.
• B) ineffective in restoring aggregate supply to its pre-crisis level, and output remained far below potential.
• C) effective in restoring aggregate supply to its pre-crisis level, but left the economy facing severely increasing inflation.
• D) ineffective in restoring aggregate supply to its pre-crisis level, but output increased due to increased consumer confidence boosting aggregate demand.

---

Definitions:

Friedman Test

A method involving non-parametric statistics aimed at uncovering treatment discrepancies across various attempts.

Sign Test

A nonparametric test used to determine whether the median of a population differs from a specified value by examining the signs of differences rather than their magnitude.

Populations Differ

A concept in statistics and research indicating that two or more populations are not identical in terms of one or more characteristics.

Degrees of Freedom

The number of independent pieces of information available to estimate another piece of information, often related to sample size in statistical analyses.