The Federal Reserve's response to the 2001 recession was to
A. raise the margin requirement and lower the reserve requirement.
B. reduce the money supply by 7% in order to reduce overinflated stock prices.
C. cut the federal funds rate over a three-year period.
D. reduce the reserve requirement.
Answer: C
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Intelligent policymaking requires making trade offs, which means
A) accepting unethical but unavoidable compromises. B) giving up what is less valuable for what is more valuable. C) putting one's own interests ahead of the interests of others. D) sacrificing some people's welfare to other people's welfare. E) violating someone's rights.
Which of the following is NOT a result of a temporary fall in foreign demand on one country's exports under floating exchange rate?
A) The DD curve shifts to the left due to reduction of aggregate demand. B) The AA curve shifts downwards due to reduction of money supply. C) a fall in aggregate output D) depreciation in home country's currency E) a fall in the home interest rate