Which of the Following Actions Should the Central Bank Take

question 48

Multiple Choice

Which of the following actions should the central bank take if monetary authorities want to reduce the supply of money to slow the rate of inflation?

• A) Sell government bonds, reducing money supply, increasing interest rates, and slowing aggregate demand.
• B) Buy government bonds, reducing money supply, increasing interest rates, and slowing aggregate demand.
• C) Decrease the discount rate, lowering interest rates and causing both costs and prices to fall.
• D) Increase taxes, reducing costs and causing prices to fall.

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Definitions:

Gene Mutation

A permanent alteration in the DNA sequence that makes up a gene, which can affect how a gene functions, potentially leading to genetic disorders or variations.

Survival of the Fittest

A concept from evolutionary biology, suggesting that organisms best adapted to their environment are more likely to survive and reproduce.

Herbert Spencer

A British philosopher and sociologist who contributed to the development of social Darwinism and emphasized the importance of individualism and societal evolution.

Charles Darwin

A 19th-century naturalist known for his contributions to the theory of evolution and natural selection.