If the economy is inflationary, the Fed would most likely:
A. encourage banks to provide loans by buying government securities.
B. encourage banks to provide loans by raising the discount rate.
C. encourage banks to provide loans by selling government securities.
D. restrict bank lending by selling government securities.
Answer: D
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If there is an inflationary gap in the economy, discretionary fiscal policy would likely involve an action to
A) shift the aggregate demand curve to the right. B) shift the aggregate demand curve to the left. C) shift both the aggregate demand curve and aggregate supply curve to the right. D) shift both the aggregate demand curve and aggregate supply curve to the left.
What new authority did the ECB receive in 2012?
A) the authority to oversee the banking systems of all member countries B) the ability to set different interest rates in different member countries C) the ability to require that member nations balance their budget D) permission to monetize the debt of member countries