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Author Question: What is the appropriate monetary policy response to a situation with deficient financial liquidity, ... (Read 59 times)

jon_i

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on: Jun 30, 2018
What is the appropriate monetary policy response to a situation with deficient financial liquidity, when there is a liquidity trap?
 
  A) an open market sale of government bonds
  B) a decrease in the interest rate on reserves
  C) an open market purchase of government bonds
  D) an increase in the interest rate on reserves

Question 2

The recession of 2008-2009 demonstrated that ________.
 
  A) consumption is especially sensitive to changes in the retirement age
  B) changes in wealth can be a major source of fluctuations in consumption
  C) as consumers get older, they tend to exhaust all their savings
  D) permanent income is something of a misnomer


elizabethrperez

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Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

B


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jon_i

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Reply #2 on: Jun 30, 2018
Thank you


elizabethrperez

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Reply #3 on: Jun 30, 2018
No problemo


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