Which of the following scenarios can be classified as passive policy making?
A) The Federal Reserve cuts the federal funds rate in order to increase economic activity.
B) The federal government increases spending in order to create jobs.
C) The Federal Reserve adjusts the money supply as appropriate to attain a target rate of inflation.
D) Congress increases expenditures in an effort to stimulate economic activity.
Answer: C) The Federal Reserve adjusts the money supply as appropriate to attain a target rate of inflation.
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