When a Major Negative Aggregate Demand Shock Hits the Economy,a

question 238

Multiple Choice

When a major negative aggregate demand shock hits the economy,a central bank can "maintain market confidence" by:

• A) raising the Federal Funds rate.
• B) buying stocks in the stock market.
• C) selling Treasury securities in the open market.
• D) promising to increase the growth rate of money if the economy worsens further.

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Definitions:

Odometer

An instrument used to measure the distance traveled by a vehicle.

Disclosure Statement

A document that provides essential information about a financial product, investment, or business opportunity.

Actual Mileage

The real distance that a vehicle has traveled, as opposed to the distance indicated by an odometer, which can be inaccurate or tampered with.

APR

APR, or Annual Percentage Rate, measures the cost to borrow money on an annual basis, including interest and additional fees.