Article Summary Concerned About Low Inflation,Federal Reserve Bank of Minneapolis President Narayana

question 123

Multiple Choice

Article Summary
Concerned about low inflation,Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the Fed needed a more aggressive stimulus policy than the setting of near-zero interest rates,and added that negative interest rates could be an effective policy tool.In a September 2015 interview,Kocherlakota stated "Given the inflation outlook,given how low inflation is expected to be,to ensure the credibility of our inflation target,taking a more accommodative stance in September would have been totally justified." While the Federal Open Market Committee chose to hold rates near zero in their September 2015 meeting,Fed Chair Janet Yellen announced that a rate increase would be warranted by the end of the year,and that "negative interest rates was not something that we considered very seriously at all today."
-Refer to the Article Summary.Implementing a negative interest rate policy,as was advocated by the president of the Federal Reserve Bank of Minneapolis,would be designed to ________ the price level and ________ real GDP.

• A)decrease;decrease
• B)decrease;increase
• C)increase;decrease
• D)increase;increase

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Definitions:

Basidia

Specialized spore-producing cells found in the reproductive structures of Basidiomycete fungi.

Asci

Asci are sac-like structures found in ascomycete fungi where the spores, called ascospores, are produced during sexual reproduction.

Mycorrhizae

Mutualistic associations of fungi and plant roots that aid in the plant’s absorption of essential minerals from the soil. Hyphae of ectomycorrhizal fungi coat plant roots; those of endomycorrhizal fungi penetrate plant cell walls (see arbuscules).

Ascospores

Sexual spores produced within the ascus of ascomycete fungi during the sexual phase of their life cycle.