To produce financial stability, the Federal Reserve would want to increase the m

ID: 1124268 • Letter: T

Question

To produce financial stability, the Federal Reserve would want to

increase the money supply during an economic boom and reduce the money supply during a recession.

raise the interest rate during a recession to prevent excessive borrowing and increase income for struggling banks.

sell bonds during a recession and buy bonds during an economic boom.

raise the money supply and cut interest rates during a recession to stimulate spending.

Which of the following is among the arguments against using government intervention to reduce income inequality?

Governments cannot have much of an impact on income inequality, so there is little use in making the attempt.

A wide gap between the rich and the poor tends to promote active participation in the democratic process.

Allowing big rewards to go to the most successful performers helps motivate creativity, innovation, and hard work.

Large income differences eventually lead to political strife and will undermine support for a market economy.

raise the money supply and cut interest rates during a recession to stimulate spending.

the above is the answer

because it encourages the consumption as well as economic growth.

Allowing big rewards to go to the most successful performers helps motivate creativity, innovation, and hard work.

the above is the answer

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