-In the Above Figure, Suppose the Economy Is in Short-Run

question 279

Multiple Choice

-In the above figure, suppose the economy is in short-run equilibrium at point D. Which of the following is the best policy option for the Fed?

• A) Increase the required reserve ratio.
• B) Increase government spending.
• C) Increase taxes.
• D) open market purchase of government securities

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Definitions:

Positive Correlation

A relationship between two variables where both variables move in the same direction, meaning as one variable increases, the other also increases.

Time Management

The process of organizing and planning the best way to divide one's time among various activities to achieve efficiency and goals.

Spearman's Rank

A non-parametric method used to measure the strength and direction of the association between two ranked variables.

Ordinal

A type of qualitative data that represents categories with a meaningful order or ranking, but without a precise mathematical difference between them.