Author Question: When inflation threatens, which of the following responses is the Fed likely to make? a. expand ... (Read 28 times)

hbsimmons88 · **on:** Jul 10, 2018

When inflation threatens, which of the following responses is the Fed likely to make?

a. expand the money supply
b. lower the discount rate and thereby the cost of borrowing by banks
c. lower interest rates
d. sell off government bonds to banks and others thereby reducing the funds banks can lend to individuals and businesses

Question 2

If you believe in the marginal utility theorythat an additional dollar of income is slightly less valuable to an individual than preceding dollarsthen what form of taxation would you most likely support?

a. flat taxation
b. marginal taxation
c. progressive taxation
d. proportional taxation