Use the Following to Answer Questions

question 158

Multiple Choice

Use the following to answer questions:
-(Figure: Fiscal Policy with a Fixed Money Supply) Refer to Figure: Fiscal Policy with a Fixed Money Supply. Assume that this economy is at E₂. Now government deficit spending is decreased, but the Federal Reserve expands the money supply. According to this model:

• A) real GDP will decrease just as much as it would if the Federal Reserve had not expanded the money supply.
• B) real GDP will decrease, but not as much as it would if the Federal Reserve had failed to expand the money supply.
• C) real GDP will expand, but not as much as it would if the Federal Reserve had not expanded the money supply.
• D) interest rates will increase.

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Definitions:

Online Trading

The act of buying and selling financial products through an online trading platform.

Market Savvy

Possessing practical knowledge or understanding of the market, often used in the context of making smart business or investment decisions.

Day Trader

An investor who buys and sells securities within the same trading day, often taking advantage of small price movements.

Random Sampling

A statistical method for selecting a subset of individuals from a larger population in such a way that each individual has an equal chance of being chosen.