If Policy Makers Wanted to Use Both Monetary and Fiscal

question 52

Multiple Choice

If policy makers wanted to use both monetary and fiscal policy to help reduce a high rate of inflation,which of the following would be most appropriate?

• A) a larger budget deficit, the purchase of securities in the open market by the Fed, and a higher discount rate
• B) a government budget surplus, the sale of securities in the open market by the Fed, and a higher discount rate
• C) a larger government budget deficit, the sale of securities in the open market by the Fed, and a lower discount rate
• D) a government budget surplus, the purchase of securities in the open market by the Fed, and a lower discount rate

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Definitions:

Operant Learning

A method of learning that occurs through rewards and punishments for behavior, also known as operant conditioning.

Insight

The ability to understand the inner nature of things or a situation in a clear and deep way, often leading to problem-solving.

Latent Learning

A process in which learning takes place, but there is no demonstration of that knowledge until a reward or incentive is presented.

Cognitive Mapping

The process by which individuals mentally acquire, code, store, recall, and decode information about the relative locations and attributes of phenomena in their everyday or metaphorical spatial environment.