If Inflation Is the Major Problem in the Economy, Which

question 16

Multiple Choice

If inflation is the major problem in the economy, which of the following would be an appropriate monetary policy response?

• A)​decreasing government spending
• B)​decreasing the discount rate
• C)​decreasing reserve requirements
• D)​none of the above

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Definitions:

Gross Income

The total income earned by an individual or organization before any deductions, such as taxes or expenses, are applied.

U.S. Census Bureau

A key institution in the U.S. Federal Statistical System that creates statistical data on the American population and economic activities.

Disposable Income

The total funds available to households for saving and spending after subtracting income taxes.

Necessities

Items or services that are essential for basic human survival and functioning, such as food, water, and shelter.