In Response to the Financial Crisis of 2007-2008,policymakers Used

question 12

Multiple Choice

In response to the financial crisis of 2007-2008,policymakers used

• A)expansionary monetary policy and expansionary fiscal policy.
• B)expansionary monetary policy and contractionary fiscal policy.
• C)contractionary monetary policy and expansionary fiscal policy.
• D)contractionary monetary policy and contractionary fiscal policy.

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Definitions:

Forward Rate

An agreed upon rate for a financial transaction that will occur at a future date, used in forward contracts.

Zero-coupon Bond

A debt security that does not pay interest but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its face value.

Semi-annually

Occurring twice a year.

Effective Annual Yield

Annualized interest rate on a security computed using compound interest techniques.