In response to the sharp decline in stock prices in October 1987, the Federal Reserve
a. increased interest rates, and the economy avoided a recession.
b. increased interest rates, but the economy was unable to avoid a recession.
c. decreased interest rates, and the economy avoided a recession.
d. decreased interest rates, but the economy was unable to avoid a recession.
c
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If the current account balance is -$100 billion, net interest = $0, net transfers = $0, then
A) the country is loaning abroad. B) there was an increase in net foreign assets. C) exports are greater than imports. D) the capital and financial account balance must be +$100 billion. E) imports are greater than exports.
When personal computers were first produced, the price was very high. As time passed, the price of personal computers fell because
A) the initial price was too high and nobody bought personal computers. B) people's incomes increased and personal computers are an inferior good. C) the demand for personal computers decreased. D) there were technological advances in the production of personal computers. E) None of the above answers is correct.