The Federal Reserve's Policy to "Lean Against the Wind" Means

question 44

Multiple Choice

The Federal Reserve's policy to "lean against the wind" means that

• A) when output is high, the Fed sets a high interest rate.
• B) when price levels are high, the Fed sets a low interest rate.
• C) when output is low, the Fed sets a high interest rate.
• D) when price levels are low, the Fed sets a high interest rate.

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Definitions:

Simplify

To make something easier to understand or apply by reducing complexity.

Collect Like Terms

The process of simplifying an algebraic expression by combining terms that have the same variables.

Operation Indicated

A mathematical operation suggested by a problem or equation, such as addition, subtraction, multiplication, or division.

Collect Like Terms

In algebra, the process of combining terms that have the same variable parts into a single term.