8. If the central bank pursues a monetary policy that is more expansionary than what firms and people expect, then the central bank must be trying to A) boost output in the short run. B) constrain output in the short run. C) constrain prices. D) boost prices in the short run. 9. High unemployment is undesirable because it A) results in a loss of output. B) always increases inflation. C) always increases interest rates. D) reduces idle resources. 10. Supply-side economic policies seek to A) raise interest rates through contractionary monetary policy. B) increase federal government expenditures. C) increase consumption expenditures by increasing taxes. D) increase saving and investment using tax incentives.

Supply-side economic policies seek toA) raise interest rates through contractionary monetary policy.B) increase federal government expenditures.C) increase consumption expenditures by increasing taxes.D) increase saving and investment using tax incentives.

Which of the following policy actions by a country’s central bank would decrease the money supply in the economy?a.Reducing the interest paid on bank reserves deposited with the central bank.b.Increasing the policy rate.c.Buying government bonds through open market operations.d.Decreasing the minimum reserve requirements.

The implementation of a contractionary policy by the Federal Reserve would result in:Question 3Answera.increased spendingb.increased economic growthc.lower interest ratesd.lower unemploymente.lower inflation

The Federal Reserve would most likely adopt an expansionary monetary policy in which economic situation?A.The country has a high unemployment rate and slow economic growth.B.The country has a low unemployment rate and steady economic growth.C.The country has a high inflation rate and rapid economic growth.D.The country has a low inflation rate and strong economic growth.

Which action taken by a central bank would reflect expansionary monetary policy?A.Raising the interest that it pays to banks on the balance of their reservesB.Selling treasury securities to banks to reduce the money supplyC.Lowering the discount rate to provide more loans to banksD.Raising reserve requirements for all banks