Reduction of Interest Rates Was Ineffective in Fighting the Great

question 24

Multiple Choice

Reduction of interest rates was ineffective in fighting the Great Recession because:

• A) Congress decreased government spending to balance the budget.
• B) crowding-out occurred.
• C) the economy was dangerously close to a liquidity trap.
• D) businesses and consumers borrowed and spent so much that it caused an inflationary gap.

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Definitions:

Additive

A substance added to another substance to alter or improve its qualities, such as food additives to enhance flavor or preserve freshness.

Dichromatic

Having two colors; in vision science, it refers to a form of color blindness in which a person can distinguish only two of the three basic color channels.

Subtractive Color Mixing

A process by which colors are created by absorbing or filtering out parts of the light spectrum, as seen in mixing pigments in paints.

Blending

The cognitive process of combining two or more distinct entities or ideas into a new, unified concept.