If There Is a Sudden Increase in Government Spending,which of the Following

question 139

Multiple Choice

If there is a sudden increase in government spending,which of the following should the Fed do if it wants to keep output unchanged?

• A) Do nothing,since the self-correcting mechanism will adjust the economy
• B) Sell bonds in the open market
• C) Wait,since output usually does not change when government spending increases
• D) Decrease the required reserve ratio
• E) Buy bonds in the open market.

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Definitions:

Unprotected Sex

Sexual intercourse without the use of barrier contraceptives, increasing the risk of transmitting STDs and unplanned pregnancies.

Risky Hobbies

Activities that involve a significant amount of danger or risk, often pursued for adventure or excitement.

Type D Personality

Personality characterized by high levels of negative affectivity (worry, irritability, gloom) and social inhibition (reticence and lack of self-assurance).

Inflammation

A biological response of body tissues to harmful stimuli, such as pathogens, damaged cells, or irritants, characterized by redness, swelling, heat, and pain.