The Fed Would Engage in ____ It Wanted to Address

question 96

Multiple Choice

The Fed would engage in ____ it wanted to address an inflationary gap.

• A)​expansionary monetary policy
• B)​contractionary monetary policy
• C)​contractionary fiscal policy
• D)​expansionary fiscal policy

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Definitions:

Unemployed Resources

Resources that are not currently being utilized in the production of goods or services, often referring to labor or capital lying idle.

Production Possibilities Curve

A graphical representation showing the maximum number of goods or services that can be produced using limited resources efficiently.

Full Employment

Refers to a situation in the economy where all available labor resources are being used in the most efficient way possible.

Unemployment Rate

The proportion of the overall workforce that is not employed but is actively looking for work and ready to take on a job.