Author Question: According to this Application, why did the recent decrease in oil prices have only a modest effect ... (Read 49 times)

savannahhooper · **on:** Jun 30, 2018

According to this Application, why did the recent decrease in oil prices have only a modest effect on economic growth?

A) Consumers may have saved the money that resulted from lower gasoline prices.
B) There was less incentive to produce energy and invest in new capital and equipment.
C) Government spending decreased significantly.
D) Both A and B are correct.

Question 2

Explain what is meant by the term monetizing the deficit.

What will be an ideal response?

nital · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

D

Answer to Question 2

Monetizing the deficit occurs when a country's central bank acquires newly created government debt by purchasing newly issued government bonds.