Which of the following strategies does monetary policy typically dictate in inflationary periods?
a. The Federal Reserve should raise interest rates.
b. Congress should increase spending.
c. Congress should raise taxes on citizens.
d. The Federal Reserve should lower interest rates.
Question 2
Which of the following was the cause of stagflation when Paul Volcker was appointed chairman of the Federal Reserve in 1979?
a. falling energy prices
b. falling unemployment rates
c. huge budget deficits
d. rising productivity
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