Which Monetary Policy Would Be Appropriate to Close a Contractionary

question 5

Multiple Choice

Which monetary policy would be appropriate to close a contractionary gap?

• A)a tax cut
• B)a decrease in government purchases
• C)an increase in reserve requirements
• D)the Fed's purchase of U.S.government securities
• E)the Fed's raising the discount rate

---

Definitions:

Individualism

A social theory favoring freedom of action for individuals over collective or state control.

Collectivism

Refers to cultural values that emphasize the importance of community, cooperation, and the collective over the desires and needs of the individual.

Psychological Distress

Psychological distress refers to a range of emotional suffering often characterized by symptoms of depression and anxiety.

Cognitive Dissonance

A psychological discomfort experienced when holding two or more conflicting thoughts, beliefs, or values at the same time.