In Response to an Inflationary Gap, the Fed

question 100

Multiple Choice

In response to an inflationary gap, the Fed

• A) waits until the price level falls before acting.
• B) lowers the federal funds rate by buying U.S. government securities.
• C) raises the federal funds rate by selling U.S. government securities.
• D) raises the federal funds rate by buying U.S. government securities.

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Definitions:

Sectioned

In technical drawing, refers to a view that shows an object as if it has been cut through a plane, revealing internal structures.

Semi-Permanent

Describes something not intended to last forever but not as temporary as frequently replaced items, indicating a medium duration of usability.

Loop

A structure, series, or process the end of which is connected to the beginning.

Axial Loading

Load applied along or parallel to the main axis of an object, typically leading to compressive or tensile stress.