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Subject - Economics:

Macroeconomics

MCQ - 214-4224

Question:

Congress has embarked on another round of expansionary fiscal policy to boost employment and get reelected. As chair of the central bank, how would you reduce the “crowding-out” effect and what macroeconomic problem might your policy exacerbate?

  1. Increase the reserve ratio, risking the devaluation of the dollar
  2. Sell government securities, risking inflation
  3. Buy government securities, risking a recessionary gap
  4. Sell government securities, risking inflation
  5. Lower the discount rate, risking cyclical unemployment

Correct Answer: D

Explanation:

The central bank wants to increase the money supply to lower interest rates. Combine the expansionary fiscal with the expansionary monetary policy, and the bank risks inflation.

Record Performance

269 MCQ for effective preparation of the test of Macroeconomics of Economics section.

Read the MCQ statement: Congress has embarked on another round of expansionary fiscal policy to boost employment and get reelected. As chair of the central bank, how would yo .... policy exacerbate? , keenly and apply the method you have learn through the video lessons for Macroeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 214-4224.

How to Answer

Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

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