If Policy Makers Wanted to Use Both Monetary and Fiscal

question 20

Multiple Choice

If policy makers wanted to use both monetary and fiscal policy to stimulate demand and reduce a high rate of unemployment, which of the following would be most appropriate?

• A)​A larger budget deficit and the purchase of securities in the open market by the Fed
• B)​A government surplus and the sale of securities in the open market by the Fed
• C)​A larger government deficit and an increase in the discount rate
• D)​A larger government surplus and a reduction in the discount rate

---

Definitions:

Substitutes

Products or services that can be used in place of each other, offering consumers alternatives if prices change.

Time Period

A specific interval of time that is defined for a particular study, event, or analysis.

Total Revenue

A rephrased definition: The cumulative income of a business from its sale of products or services, equivalent to the price of goods sold multiplied by the quantity sold.

Price Cut

A reduction in the selling price of products or services, typically to stimulate demand or respond to competition.