Which of the Following Is True

question 35

Multiple Choice

Which of the following is true?

• A)​When increased government purchases or expansionary monetary policy does give the economy a boost, no one knows precisely how long it will take to do so.
• B)​Given the difficulties of timing stabilization policy, an expansionary monetary policy intended to reduce the severity of a recession may instead add inflationary pressures to an economy that is already overheating.
• C)​If velocity changes, but it moves in a fairly predictable pattern, the connection between money supply and GDP is still fairly predictable.
• D)​All of the above are true.

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Definitions:

Risk-Averse

A characteristic describing an investor or decision-maker who prioritizes avoiding loss over making a gain, typically favoring safer investments.

Mean-Standard Deviation Graph

The mean-standard deviation graph is a visual representation used in finance to display expected returns (mean) of an investment against its risk (standard deviation).

Utility Function

A mathematical representation in economics that defines the level of satisfaction or utility an individual receives from different bundles of goods and services.

Expected Return

The average of the probability distribution of possible returns for an investment, symbolizing its anticipated profitability.