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If the Fed Provided Additional Credit When the Economy Was

Question 62

Multiple Choice

If the Fed provided additional credit when the economy was expanding and reduced credit when businesses were not expanding, the result would be:


A) low interest rates and increased national savings.
B) to cancel out any positive or negative effects on the overall economy.
C) the "flooding" of money in the system, stimulating spending and job creation.
D) the worsening of the economy, because it would choke off the supply of money when it was needed most.
E) growth in GDP, because the Fed would be acting in unison with the general direction of the economy.

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