The Fed's countercyclical policy during expansion and prosperity includes:
A. raising the required reserve ratio, raising the discount rate, and selling government bonds on the open market.
B. raising the required reserve ratio, raising the discount rate, and buying government bonds on the open market.
C. raising the required reserve ratio, cutting the discount rate, and selling government bonds on the open market.
D. lowering the required reserve ratio, cutting the discount rate, and buying government bonds on the open market.
Answer: A
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
The following figure illustrates which of the following? (check all that apply)
a. That the resources used to produce industrial robots and pizzas are perfectly flexible and interchangeable. b. That as one moves to the right and produces more pizzas, the number of robots that must be given up rises. c. That as one moves to the right and produces more pizzas, the number of robots that must be given up remains constant. d. That the resources used to produce industrial robots and pizzas are not perfectly flexible and interchangeable. b. That as one moves to the right and produces more pizzas, the number of robots that must be given up rises.